FICC | Bonds

In this Insight, we continue our series of reports outlining investment frameworks for inflation-linked bonds in the developed markets, this time focusing on Japan. Our Japanese Inflation-Linked Golden Rule suggests that investors should overweight Japanese inflation-linked bonds versus nominal JGBs on a strategic (6-12 month) investment horizon. Our new Japanese inflation models suggest that there is a material risk that Japanese inflation exceeds the current level of market-based inflation expectations over the next year.

A risk/reward ranking of the 10 major US investment grade corporate bond sectors.

Our takeaways from this afternoon’s FOMC meeting.

The Bank of Japan delivered a historic policy adjustment this week, ending both negative interest rates and Yield Curve Control. In this Insight, BCA’s global fixed income and currency strategists discuss the immediate implications of the move for Japanese bond yields and the yen, and the potential for additional tightening actions.

Our Portfolio Allocation Summary for March 2024.

Special Report

In this Special Report, we introduce our UK Linkers Golden Rule – a framework to profitably trade and invest in UK inflation-linked bonds versus nominal UK gilts. The Rule is currently signaling that nominal Gilts should outperform UK linkers over the next year as UK inflation slows.

We update the indicators in our duration checklist following this morning’s employment report.

In this Strategy Insight, we take a comparative look at two of the largest spread product sectors in Europe – Italian government bonds and investment grade corporates. We make the case for favoring Italy over investment grade in the event of a downturn in European economic sentiment.

The first in a series of Strategy Insights where we present a checklist for extending duration in each major government bond market. This first entry focuses on the US.

We rank the US spread sectors in terms of risk versus reward.