Highlights

  • Global bond yields have risen across all maturities, with longer-dated bonds reaching multi-year highs.  

  • A mix of factors is driving the rise: central bank policy uncertainty amid fears of sticky inflation, funding needs and a lack of fiscal discipline. 

  • A global and flexible approach can help investor adapt to a volatile economic and market landscape.

 

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In this edition

Global fixed income markets have seen significant moves in bond yields over the summer, particularly at the long end of the curve. In the US, 30-year Treasury yields reached the highest level in almost two decades, while 10-year yields climbed to levels not seen since before Trump returned to office. The rise in longer-maturity bond yields partly reflects the change in economic conditions, including stronger-than-expected real growth, supported by capex spending, and sticky inflation. But it also reflects the higher compensation required to hold longer-dated bonds as debt levels remain elevated and debt issuance among governments and businesses continues to increase.

For investors, this environment may provide an opportunity as interest rate levels are becoming increasingly attractive. That said, it remains essential to adopt a diversified and dynamic approach.

Key dates

 

8 Sep

South Korea GDP, Japan GDP, US Small Business Sentiment

 

 

 

10 Sep

Germany CPI, Italy industrial production, ECB policy rate

 

 

 

11 Sep

Japan PPI, UK industrial production, US CPI and federal budget balance
 

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