Global Bond Market Brief

Notes from the Global Fixed Income Desk

By Rich Taylor & Joyce Huang, CFA - June 2019

Market and Performance Summary

Treasury yields tumble. U.S. Treasury yields continued to fall in June, marking the third consecutive quarter of declines. Since the end of September 2018, the yield on the benchmark 10-year note has fallen more than 1 percentage point amid a stretch of safe-haven buying. Investor concerns about global growth and trade drove the flight to quality. Meanwhile, the Fed’s policy pause and dovish demeanor helped push short-maturity Treasury yields sharply lower.

U.S. bonds advance. Declining Treasury yields helped lift the broad U.S. bond market in June and for the second quarter, and all investment-grade sectors delivered solid gains.

Corporates rally. Investment-grade corporates rallied in June, capping a strong second quarter. Declining yields and still-solid U.S. corporate fundamentals fueled the gains. High-yield corporates rebounded in June, aided by a rallying stock market and rising oil prices. June’s gains helped fuel positive results for the quarter, but the asset class underperformed investment-grade corporates.

Global bonds outperform. Slowing global growth, trade tensions, Brexit uncertainty and dovish central bank policy pushed non-U.S. developed market yields lower. Global bonds outperformed U.S. bonds in June and for the quarter. Falling U.S. yields and expectations for Fed easing aided emerging markets (EM) bonds, particularly in June. A declining U.S. dollar also helped.

Rich Taylor
Rich Taylor
Sr. Client Portfolio Manager
Joyce Huang, CFA
Joyce Huang, CFA
Sr. Client Portfolio Manager

Global Bond Market Brief

Notes from the Global Fixed Income Desk

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