Corporate Bonds
Interest rate volatility is very low across developed market fixed income. Investors should maximize the carry in their portfolios to outperform in a low rate vol environment.
The 10-year Treasury term premium is now competitive with Baa- and Ba-rated credit spreads. Even without term premium compression, duration carry trades could outperform credit carry trades in a low rate vol environment.
This year, we once again present our 2026 outlook as a retrospective from the future – a future in which the AI boom turned to bust.
Next week, please join me for a Webcast on Wednesday, December 17 at 10:30 AM EST (3:30 PM GMT, 4:30 PM CET) to discuss the economy and financial markets. We will also host a Webcast for APAC on Tuesday, December 16 at 8:00 PM EST (9:00 AM HKT+1 day).
And with that, I will sign off for the year. I wish you and your loved ones a very happy and healthy 2026. We will be back on Friday, January 2 with our MacroQuant Model Update.
We present our five key views for global fixed income markets in 2026. A year that will see the global easing cycle come to an end.
Precious metals, corporate credit, and tech stocks are all showing signs of late-cycle euphoria. We identify various trigger points that investors should monitor to turn more bearish.