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Global Fixed Income Strategy Monthly Report

1 December 2025
Invesco
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In our regularly updated macroeconomic analysis, we offer an outlook for interest rates and currencies and look at which fixed income assets are favoured across a range of market environments. 

In this edition:

Macro

We believe the global macro backdrop presents opportunities for fixed income investors. We favour positioning for a weaker US dollar, steeper global yield curves and selective credit exposure.

Credit

Hyperscalers are driving trillions of dollars in data center investment and increasingly turning to debt financing, which raises risks for investors. We highlight the opportunities and challenges of this trend.

Interest rate outlook

We are neutral on European rates. We expect the ECB to remain on hold in the near term, though a rate cut in late 2025 or early 2026 is possible if inflation undershoots expectations and growth risks rise. We are overweight UK rates, as core inflation and wages have undershot Bank of England expectations, supporting expectations of future rate cuts.

Currency outlook

We hold an overweight position in the euro, based on expectations of continued US dollar weakness and narrowing interest rate differentials. For the British pound, we maintain a neutral stance.

The bottom line

We speak with CIO and Head of Municipals, Mark Paris, about recent events impacting the US municipal market, including the October Fed rate cut, the New York Mayoral election and the elevated new issue calendar.

Read previous editions

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  • Investment risks

    The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

    Important information

    This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication.

    Views and opinions are based on current market conditions and are subject to change.

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