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Global Fixed Income Strategy Monthly Report

September 10, 2025
Invesco
The landmark of Toronto CN Tower rising straight up alongside compact corporate skyscrapers in sunrise.

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

Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium suggested he is open to a rate cut in September. We believe a softening US labor market justifies a recalibration of monetary policy.

Credit

With the average effective US tariff rate now nearly eight times higher than at the start of 2025, we explore how companies are responding with increased strategic precision, adjustments to cost structures and operational plans.

Interest rate outlook

We are neutral on European rates. We expect the European Central Bank (ECB) to be on hold at its September meeting, after pausing in July. In contrast, we are overweight on UK rates.

Currency outlook

We are overweight the euro, given expected fiscal improvement in 2026 and anticipated recovery in the region’s economy. We are underweight the British pound, which could see volatility ahead of the November Budget.

The bottom line

We speak with Mark Paris, CIO and Head of the Invesco Municipal Bond Team, about this summer’s supply dynamic and other factors driving municipal markets.

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

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

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