Fixed Income

Investment Insights by our experts and thought leaders

Fed Normalization, but not ECB or BOJ

We only expect mild further easing ahead, especially as the ECB does not wish to cause a rupture while the Fed is hiking rates.

We forecast that Asia Pac ex Japan, Japan and Europe will outperform in the next six months, while the US should underperform and, thus, deserve an underweight stance vs. all other regions.

Asian Fixed Income Monthly Outlook - December 2015

US Treasuries (USTs) yields ended the month higher. October non-farm payrolls indicated a surge in job growth, keeping the US Federal Reserve (Fed) on course for a possible rate hike in December.

Divergent monetary policy in US and Europe: Can it last?

As we enter 2016, we believe the divergent monetary policy theme will continue -- with the major risk to global bond markets and Fed rate rises continuing to be Europe.

The Japan Update – The Japanese Government’s Objectives for TPP

A framework agreement for the Trans-Pacific Partnership was reached in October 2015, and the governments of participant countries are working to ratify the agreement and formally launch the partnership.

What's to come? - China's RMB as a global reserve currency

The IMF's decision to include the Renminbi into the SDR is a major push for the RMB to become one of the world's major reserve currencies.

Australia: Lower GDP growth and CPI should mean lower 10-year bond yields

Our lead Australian fixed income portfolio manager discusses her intermediate-term outlook for the bond market “down under.”

Asian Fixed Income Monthly Outlook - November 2015

Prices of the US Treasuries (USTs) ended the month lower. Risk-on sentiment prevailed for the most part of October, favouring risk assets over perceived "safe-haven" instruments.

Asian Fixed Income Monthly Outlook - October 2015

US Treasuries (USTs) registered gains in September. Yields initially trade in a tight range, but subsequently jumped mid-month, in anticipation of the announcement from the US Federal Reserve (Fed).

What Investment Themes Will Drive Credit Markets?

What Investment Themes Will Drive Credit Markets?

A better supply/demand balance in Europe, outperformance of “high yield“ globally, positive event-risk in the telecom sector and opportunities in local currencies, as well as other credit related investment themes, all present interesting opportunities for generating positive returns, even in a challenging environment.

Sifting Through The Ruble: Global Commodity Currencies

Our Nikko Asset Management fixed income experts, led by Simon Down, discuss the prospects for commodity currencies.

Asian Fixed Income Monthly Outlook - September 2015

US Treasury (UST) yield curve, along with other asset classes, experienced volatile swings in August. The Chinese central bank’s announcement that it would modify the approach to setting the CNY fixing midpoint effectively weakened the currency against the USD.

Zooming in on the Pacific Decade: China's Devaluation

A concentrated, stock-picking approach is the best way to serve a long-term investor's goal of capital appreciation

Fintech Evolution in China

The internet revolution is coming to the financial sector, addressing inefficiencies in current system and business models. In China’s case we are witnessing a combination of financial liberalisation with an internet revolution in the financial sector.

US rate rises unlikely to have significant impact on 10-year Treasuries

Even though the current term premium on US Treasuries seems too low, it is unlikely to rise significantly unless offshore bond yields start to rise.

Why did China devalue the renminbi?

While RMB weakness will likely persist for a few months, we don't expect the currency to devalue more than 10% versus USD and we maintain our confidence that the currency will be included into the IMF SDR basket in a year from now.

Asian Fixed Income Monthly Outlook - August 2015

US Treasury (UST) yield curve bull flattened in July, as yields of short-dated USTs rose on Federal Reserve (Fed) Chairperson Janet Yellen’s statement that interest rates are likely to rise later this year while the yields of longer-dated USTs fell on the weakening inflation outlook.

Market Commentary – Asia Corporate High Yield Market Update

Spreads in Asian corporate high yields (HYs) have been impacted by recent market volatilities. Risk aversion ruled the market after the surprise change in RMB fixing rule which led to concerns on the weakening growth in China and its impact on the emerging markets (EM) countries.

After the China devaluation, Asia currencies and equities broke down – in effect, catching down to some degree to Latin America, Europe, Middle East and Africa, which had already been significant underperformers.

Asian Fixed Income Monthly Outlook - July 2015

Yields of US Treasuries (USTs) bear steepened in June, with developments in Europe dominating sentiment. The 10-year Treasury eventually ended the month at 2.35%, 23 basis points (bps) higher compared to end May levels.