Our Scans · (FS.5.01) Bond Market · Weekly Summary

• [New] Despite the equity market's Goldilocks obsession, bond markets are still not as ready to dismiss the threat of a second wave of inflation, as evidenced by the 10 year US treasury yield pushing back towards its 2024 highs once again. Money to the Masses
• [New] Investors are betting the Federal Reserve will begin cutting interest rates in 2024, boosting corporate profits and bolstering the appeal of stocks as yields on bonds and savings accounts fall. Yahoo News
• The Ripple stablecoin, expected to be launched later this year, will be pegged 1-to-1 to the US dollar, and backed by cash equivalents including U.S. dollar deposits, U.S. government bonds and other low-risk investments. FX Empire
• BRICS, a bloc of leading emerging markets, is preparing to launch new bonds in global markets, which will be available in local currencies rather than in the US dollar. Modern Diplomacy
• Yes, US bonds pay more interest than European bonds, but the European investor has to take a dollar risk, which can be beneficial or detrimental. Morningstar UK
• Bond markets have slumped after a mixed batch of data on the US economy created uncertainty about when the Federal Reserve will announce a cut in interest rates. The Telegraph
• Euro zone bond yields rose on Thursday after hotter-than-expected US inflation data left investors wondering if the Federal Reserve will cut rates in June, as markets expected, or later. The Telegraph
• Equity and bond markets are likely to start 2024 on a positive note, supported by hopes of a soft landing and central bank policy shifting towards supporting growth, but we remain on watch should macro winds shift towards a harder landing. Business & Financial Times
• The ideal scenario for bond markets in the early months of 2024 involves moderate growth and cooling inflation, which could justify modest rate cuts without reigniting demand pressures. Voya Investment Management
• The first half could be rough as growth weakens and possibly goes negative and valuations are less attractive than a year ago, but shares should ultimately benefit from rate cuts and lower bond yields and the anticipation of stronger growth later in the year and in 2025. Amp
• Investment-grade bonds have relatively long duration, making them sensitive to rates if the Fed, for example, is much slower to cut rates than investors hope for. financialpost
• Nordea expects only a limited further increase in bond yields which will limit scope for dollar buying. Exchange Rates UK
• Global markets rallied during the final two months of 2023, as bond yields pulled back on hopes that the Fed and ECB would begin cutting interest rates in early 2024. CNBC
• Whether the U.S. economy will tip into recession and with the return of bonds as an attractive complement to stocks, investors have much to consider in 2024. RBC WEALTH MANAGEMENT
• With inflation falling faster than expected, the U.S. Federal Reserve has indicated it is done raising interest rates - news that triggered a fourth-quarter rally across bond markets. AdvisorAnalyst.com
• Within IG credit, average levels of spread can be generated across markets such as Australia, the UK and Canada, which creates better yield opportunities than holding long-dated sovereign bonds. Nikko AM Global Site
• A no landing scenario would be positive for stocks because investors will view higher Fed interest rates and bond yields as a consequence of stronger growth more than high inflation or unanchored inflation expectations. MarketScreener
• The decision to lower gross borrowing to INR14.1trn will reduce bond supply at a time when there will be more demand from foreign investors due to India's bond index inclusion. Economic Times
• Citi Research is turning more positive on Italian government bonds, expecting 10-year BTP-Bund yield spread to continue to tighten toward 140-150 basis points, unless fundamentals are brought into play by any downside data surprises. MarketScreener
• With interest rates likely at their peak as cuts forecasted by many (including the Federal Reserve) for 2024, real and nominal bond yields offer security with attractive income prospects. Visual Capitalist

Last updated: 23 April 2024