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Bond Market Perspectives | Week of April 20, 2015
KEY TAKEAWAYS Foreign buying of U.S. bonds has slowed over recent years but remains a firm source of demand in the domestic bond market. Foreign purchases are likely to continue to take a backseat to economic growth and Federal Reserve interest rate expectations as a driver of bond prices and yields. FOREIGN FACTORS Gauging foreign…
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Bond Market Perspectives | Week of December 15, 2014
Highlights Lower inflation expectations as a result of falling oil prices have weighed on TIPS prices during the second half of 2014. TIPS underperformance has led to the lowest market-implied inflation expectations of the past four years. We do, however, find TIPS an attractive high-quality option and certainly more appealing than Treasuries as a result…
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Bond Market Perspectives | Week of December 8, 2014
Highlights With the price of oil now down 41% from a peak of $107 per barrel on June 20, 2014, through Monday, December 8, 2014, we take another look at the impact of lower oil prices on the high-yield bond market. Recent high-yield market weakness has already accounted for a rise in defaults from lower…
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Bond Market Perspectives | Week of December 1, 2014
Highlights: With sustained improvement in economic growth, slowly rising inflation, and the approach of the Fed’s first interest rate hike, bond prices are likely to decline in 2015. High-yield bonds and bank loans can help investors manage this challenging bond market. 2015 Fixed Income Outlook: Handle with Care Bond markets are likely to transition to…
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Bond Market Perspectives | Week of November 17, 2014
Highlights Demand from overseas investors once again helped the bond market shrug off stronger economic data and weak Treasury auction demand. Favorable yield differentials between Treasuries and key overseas bond yields may provide lingering support for the domestic bond market. The Fed, this week’s release of Fed meeting minutes, and the European economy likely hold…
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Bond Market Perspectives | Week of November 10, 2014
Highlights We find it premature to draw conclusions regarding oil prices and the performance of the broad high-yield bond market. Default rates, the pace of economic growth, and the strength of credit quality metrics among high-yield issuers–not oil prices –will be the primary drivers of high-yield bond market returns. High-Yield Bonds & Oil Prices The…