There are 30 item(s) tagged with the keyword "credit".
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The macroeconomic outlook suggests moderating growth and controlled inflation. However, uncertainty has risen post-US election, with the new administration's policy agenda still unclear. Proposed trade tariffs may initially boost US inflation but could dampen growth modestly. Global impacts may skew negative, widening divergences between the US and Europe, China, and others.
Corporate bonds performed well in 2024, but government bond volatility dampened overall fixed income returns. Central Banks fell short of market rate-cut expectations, with resilient economies, especially in the US, and political upheaval fueling turbulence. Will 2025 bring similar challenges?
Over the last few days, three of the major Central Banks – Bank of England, Bank of Japan and US Federal Reserve - have completed their rate setting meetings – and each has had a different outcome: up, down and no change!
Investor allocations to bonds have been low in recent years with many investors preferring to hold cash or money market funds instead. In the period of low/rising bond yields and high deposit rates, this made perfect sense. Now, as we enter the next phase of the interest rate cycle, this is no longer the case.
So far, much of 2024 has been a waiting game with the market focused on US inflation and when it might spur the Federal Reserve (Fed) to cut interest rates. However, there have been signs that the Fed’s string of rate hikes may finally be bringing inflation under control. Monthly inflation was flat in May—its lowest level since July 2022—which helped push the year-over-year inflation rate down to 3.3% from 3.4% in April.
The maturity wall has been a hot topic lately—and rightfully so. After all, the ability of issuers to repay their debt obligations is a key consideration for bond investors. And assessing the upcoming maturity schedule becomes even more critical for high yield companies, some of which may face strained liquidity or challenges accessing capital markets.
Jenna Barnard, Co-Head of Global Bonds, looks at key factors shaping the economy and markets and why the disinflation dynamic should leave bonds well positioned as 2024 progresses.
Colin Finlayson, Euan McNeil and Thomas Hanson from Aegon Asset Management’s fixed income team take a closer look at the prospects for Sovereign Bonds, Investment Grade Credit and High Yield Credit in 2024.
Although caution is warranted, high yield continues to offer attractive opportunities.
In the latest Strategic Thinking video, Colin Finlayson, co-manager of the Aegon Strategic Bond strategies reviews what was a very challenging month for global bond markets, but why he believes the peak of the interest rate cycle and falling inflation make the outlook even more attractive. He also gives an update on how we are allocating against this backdrop and discusses why flexibility will be key.
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