Monthly report
US Treasuries re-price for Goldilocks after a soft landing for growth
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G7 yield curves dis-inverted modestly in September, as long yields rose sharply, despite central bank policy pauses, and higher energy prices. The move in long yields suggests some capitulation to the higher for longer narrative, with the US economy still near full employment. Chinese and EM bonds again outperformed.
Key highlights:
- Macro and policy backdrop – Soft landings for growth give central banks room to retain tight policy settings
- Yields, curves and spreads – Curve dis-inversion in long bonds as some long G7 yields reach new cycle highs
- Credit and MBS analysis – Signs of recovery in US real estate. MBS spreads trending wider as Fed unwinds holdings
- Sovereign and climate bonds – High Japan and Euro weight in climate-WGBI continues to squeeze returns versus WGBI
- Performance – Long maturities suffered more losses in Q3. HY credit, China and EM bonds outperformed
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
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