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Global Fixed Income Strategy Monthly Report

6 January 2026
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

The year-end Invesco Fixed Income Global Investor’s Summit included discussions around global macro trends and implications for markets. We share our key conclusions here.

Credit

Many Summit discussions centered on AI - and the role of private credit financing. We speak with Invesco Fixed Income portfolio managers about the rise of private credit in the investment grade space. 

Interest rate outlook

We are neutral on European rates. Markets have priced in hikes for next year, but we believe expectations are premature given lower-than-expected inflation and growth risks. We are overweight UK rates. Although the December rate cut decision was close, the Monetary Policy Committee consensus was toward further easing.

Currency outlook

We are overweight the euro based on further expected US dollar weakness, a supportive eurozone fiscal environment and potential flows away from US dollar assets. We are underweight the British pound. The UK’s negative fiscal impulse should weigh on growth and interest rates, leading to a weaker pound.

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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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