Income

Quarter ends are always a useful time to take a step back and assess what the main macro drivers during the quarter were, which trades worked and which did not and to refresh macro views for the next period.

Yesterday was an eventful day for markets. We started off with inflation data in Europe, followed by an earnings release by New York Community Bank that showed large provisions in their commercial real estate loan book, before moving onto the Fed’s Federal Open Market Committee meeting

Last year saw returns in European high yield (HY) of approximately 12%, driven by tighter spreads (-102bps) and lower government bond yields (five-year bunds were -59bps).

We recently highlighted in our 2024 outlook our expectations of significant inflows into fixed income to be an important technical driver of performance in the year ahead.

In a particularly noteworthy start to the year, we have seen the UK take the lead in the ABS primary markets, with two UK master trust RMBS deals pricing in the first week of January,

After a horrible year for financial markets in 2022, the macro-outlook for 2023 had a lot of consensus views, with most predicting a much better year ahead, helped by supportive rate cuts from central banks and positive returns from both government bonds and credit.  

The cuts are coming as the cycle of interest-rate hikes ends. In his latest blog, George Curtis discusses how falling inflation, weaker job reports, and signs of a European recession are reshaping expectations for interest rates.

Ford reclaims its investment-grade status after almost four years in high-yield territory. Chris Holman's latest blog reveals why this isn’t just a win for the car company and will have a positive impact on the entire US high-yield market.

Recently, our credit experts delved into the performance of the high-yield market, revealing how the maturity wall does not seem to be a significant challenge for most companies.

George Curtis breaks down the latest developments following this week’s Quarterly Refunding Announcement and the Treasury Borrowing Advisory Committee update.

Whilst bank debt has recovered from the contagion of the US regional banking crisis and the Credit Suisse write down event earlier this year, many bonds are still trading wider than they were at the beginning of the year.

Yesterday, market participants received two important reports about the state of the economy in the Eurozone. Firstly, the October Markit PMI – Purchasing Managers’ Index - reports showed a continued deterioration in growth in the manufacturing as well as the services sector.