Global Bond Market Brief

Notes from the Global Fixed Income Desk

By Rich Taylor & Joyce Huang, CFA - April 2019

Market and Performance Summary

Treasury yields rise. After rallying in March, Treasury yields increased in April, as better-than-expected economic data in the U.S., China and Europe helped ease investor concerns about global growth. The 10-year Treasury yield rose 10 bps to end the month at 2.50%, according to Bloomberg. The yield on the two-year Treasury note was unchanged at 2.27%, and the yield curve steepened.

Risk remains in favor. Positive fundamental and technical factors aided corporate bond returns, particularly in the high-yield sector. Gains among investment-grade corporates helped offset losses among Treasuries and keep the Bloomberg Barclays U.S. Aggregate Bond Index nearly flat for the month.

TIPS are on top. Within the U.S. Treasury market, TIPS generally delivered gains and outperformed nominal Treasuries. Even as current inflation remained muted, TIPS benefited from an uptick in longer-term inflation expectations.

Global yields increase. Stabilizing to improving global growth data helped push bond yields higher in Europe, the U.K. and Japan, and global bonds generally underperformed U.S. bonds.

EM bonds mixed. Emerging markets (EM) bond returns were mixed. Risk-on investing helped external bonds advance, particularly corporates, while a stronger U.S. dollar and rising U.S. interest rates pressured local-currency EM bonds, which declined.

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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