The state of play in fixed income after April turmoil
April was one of the most volatile months across financial markets in recent memory, triggered by President Trump’s sweeping tariff announcement on April 2.
Insights Topic
US
Was negative US growth actually negative?
The Bureau of Economic Analysis (BEA) published its first estimate for Q1 US GDP growth, which at -0.3% was slightly worse than the Bloomberg consensus of -0.2% on a quarter-on-quarter (QoQ), seasonally adjusted, annualised basis.
Rating upgrades highlight Europe’s improved position
With a week currently feeling like a long time in geopolitics, the European sovereign crisis at the beginning of the last decade feels even more like a distant memory. The road to recovery for Europe’s periphery economies has been long and windy, but post-Covid it has been surprisingly smooth.
Three conclusions from a chaotic week for markets
Last week was one of the most volatile on record. President Trump's announcement of a 90-day pause in reciprocal tariffs for every country bar China sparked one of the largest rallies in equity indices in recent history.
Reciprocal tariffs, but not as we know them
“Liberation Day” has landed, and not with a whimper. In extraordinary scenes in the Rose Garden of the White House, President Trump held up a board outlining the level of tariffs the US will impose on countries around the world, and in most cases they were worse than worst-case expectations.
Will Bunds bounce back against US Treasuries?
If we look at the main drivers of returns in Q1 2025, the first one that comes to mind is tariffs. But while this is true for equities and credit spreads, in the context of global fixed income the main driver of total returns in Q1 was the Bund sell-off triggered by a momentous shift in German fiscal policy.
What does shifting sentiment mean for ABS and CLOs?
Last week we wrote about a notable shift in market sentiment and how this had impacted our view of relative value within fixed income. So, where has the impact been felt, and has it changed our view on relative value?
US growth fears highlight strength of European yields
Volatility in Bunds seems to have calmed down slightly in the last few days as markets continue to digest huge fiscal expansion plans from Germany and the European Union. At the same time, many forecasters have been downgrading their US growth projections after reassessing the level of pain President Trump seems willing to inflict on the US economy in order to implement his policy agenda.
Market moves and headlines - not enough to change macro outlook
Last week, risky assets continued to experience a somewhat volatile period. The tone was generally a risk off one, with correlations between risk free and risky assets back to negative.
Could bank deregulation explain resilience in US Treasuries?
In a week when US core consumer price inflation unexpectedly rose to 0.4% month-on-month and Federal Reserve (Fed) chair Jerome Powell told Congress the central bank was in “no hurry” to cut interest rates, many market participants have been surprised by the relatively muted reaction in US Treasuries (USTs).
Manufacturing data showing signs of life
Manufacturing data has been a relentless purveyor of bad news for the best part of the last 24 months, as abnormal growth rates post-Covid turned into a swampy contractionary trend from which the sector has struggled to emerge.
Tracking Trump’s tariffs
Markets had their first taste of Trump Tariffs 2.0 on Monday after levies on Mexican, Canadian and Chinese exports were announced over the weekend.