Thought leadership
Global Fixed Income Strategy July 2025
July 16, 2025
min read
min video
Key takeaways
Cautious global macro outlook amid policy uncertainty
US growth is supported by resilient consumer spending but tempered by cautious corporate behavior and policy unpredictability.
Neutral to overweight on major rates
Fixed income markets are positioned neutrally across major regions, with expectations for range-bound yields in the US, further ECB easing in Europe if needed, and continued policy support in China and Japan.
Selective credit opportunities and rotation toward non-US assets
Credit markets remain robust, with strong demand for US investment grade assets despite tight spreads and a preference for local currency emerging market debt over hard currency.
Get an analysis of important drivers of global fixed income markets, including macroeconomic trends, interest rates, currencies, and credit, in our monthly global strategy report.
In our July report:
- Global macro strategy
Get the macro conclusions from Invesco Fixed Income’s June Global Investors’ Summit, where investors discussed macroeconomic trends in the US, Europe, China, and emerging markets. - Interest rate outlook
US: We’re neutral US interest rates and expect yields to remain range bound, as conflicting signals from growth and inflation balance each other out.
Europe: We’re neutral European interest rates, as the ECB has normalized interest rates in line with policymaker estimates of the eurozone’s neutral rate. - Currency outlook
US: We’re underweight the US dollar as reduced confidence in US relative growth outperformance and institutional stability could dampen inflows relative to other regions.
Europe: We’re overweight the euro, as we expect eurozone fixed income and equity assets to continue to garner inflows. - Global credit strategy
IFI credit investors share where they see opportunities across US and European investment grade, European high yield, and emerging markets.
