February 06, 2024

Fixed Income Insights - February 2024

Monthly report

Slower easing prospects worry markets, despite scope for rate cuts

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Central bank caution and an inflation uptick drove a long end sell-off in January, as markets re-assessed how quickly rates will fall. China and EM bonds proved safer havens, as did credit, despite high issuance. Middle East tension has not yet driven safe haven buying of government bonds, or major damage to supply chains.

Key highlights:

  • Macro and policy backdrop – Realisation the case for a rapid easing cycle is unclear?
  • Yields, curves and spreads – Modest bear steepening as curves adjust to central bank caution
  • Credit and MBS analysis – Credit spreads tightened further as government yields rose, and credit proved a safer haven
  • Sovereign and climate bonds – Green bonds recover after duration-led sell-off in sovereigns in 2022-2023
  • Performance – Longs gave up some Q4 gains in January. Credit, China and EM bonds held up well in sell-off

These reports provide actionable insights on global fixed income markets. They cover shifts in global yield curve and credit spreads, across sovereign, inflation-linked and corporate indices, and FX-adjusted return performance using proprietary month-end data from our global fixed income indices.

For specialist content on a range of investment topics, including macroeconomic analysis and how it affects market performance and multi-asset analysis, viewed through our indices and data, explore our Global Investment Research hub.

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