Highlights Chart 1Inflation Indicators Hook Up  There’s no doubt that inflationary pressures are building in the US economy. The latest piece of evidence is January’s ISM Manufacturing PMI which saw the Prices Paid…

Highlights Chart 12020 Returns  After a tumultuous start to the year, corporate bonds rallied in 2020 H2, managing to eke out small annual gains versus Treasuries. Specifically, investment grade corporates outperformed…

Highlights Chart 1Bond Yields & The CRB/Gold Ratio  In our last report of November, we noted that the rising COVID case count was likely to lead to a challenging few months for the US economy, but we also questioned…

Highlights Chart 1Bond Yields Have Upside In A Blue Sweep  Today’s US election has important implications for the near-term path of bond yields. In particular, a “blue sweep” outcome where the Democrats win…

Highlights Chart 1Spending Held Up In August  The bulk of the CARES act’s income support provisions expired at the end of July and Congress has still not reached consensus on a follow-up package. Unsurprisingly,…

Highlights Chart 1Permanent Job Losses Still Rising  The biggest event in bond markets last month was the Fed’s shift toward a regime of average inflation targeting. Treasuries sold off in the days following the…

Highlights Chart 1How Much Lower For Real Yields?  Treasury yields moved lower last month even as the overall bond market priced-in a more reflationary economic environment. Spread product outperformed Treasuries and…

Highlights Chart 1More Stimulus Required  The unemployment rate fell for the second consecutive month in June, down to 11.1% from a peak of 14.7%. Bond markets shrugged off the news, and rightly so, as this recent pace of…

Highlights Chart 1More Stimulus Forthcoming?  Last week we posited that bond yields could move modestly higher during the next couple of months as the US economy re-opens and economic growth recovers. However, any economic…

Highlights Chart 1Low-Rated Junk Returns Are Lagging  The story of bond markets in April is a story about the Federal Reserve. Traditional relationships have broken down and clear divisions have formed between sectors that…