Global Fixed Income Strategy Monthly Report

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 US administration may soon declare a national housing emergency. We examine the case for an emergency, potential government policy changes and market impact.

Credit

We highlight the rising number of corporate breakups in the US and what they mean for bondholders.

Interest rate outlook

We are neutral on European rates. We believe the ECB has reached its neutral rate and we expect it to remain steady unless external shocks require further action. We are overweight UK rates and believe there is little room for short-term rates to move higher unless inflation rises sharply. Longer-term rates hinge on the budget outcome.

Currency outlook

We are overweight the euro on expectations of continued US dollar weakness and positive 2026 European economic performance.  We are underweight the British pound based on fiscal risks and potential longer-term rate declines in line with developed peers.

The bottom line

We speak with Senior EM Strategist Daniel Phillips about the US dollar’s recent weakening trend and why it might bode well for EM debt performance.

Read previous editions

• September edition
• August edition
• July edition