From Daily Telegraph: 2024-05-17 02:44:57

Bond investors are hopeful as US and Australian bond yields appear to have peaked after a tough few months. The recent surge in yields led to a sell-off, but data indicating potential interest rate cuts gave bonds a boost. The US economy may be slowing, which could affect bond yields in the future.

Loomis Sayles & Company’s global bond fund manager, Lynda Schweitzer, is optimistic about the bond market. She increased the duration of the US portfolio as inflated inflation data was priced in, but then the market changed course. Schweitzer is now looking for opportunities as bond spreads normalize.

Chinese stocks and bonds have experienced extreme fluctuations, with US corporate bonds outperforming government bonds. Bank of America warns of a potential long-term bear market for bonds due to inflation and global economic trends. Loomis Sayles anticipates possible rate cuts, but a growth scare could impact future bond yields.

Schweitzer is closely monitoring the US 10-year bond yield, expecting potential drops to December 2023 levels. She emphasizes the need for weaker economic data to push yields even lower. While uncertainties loom, the economy remains in a cycle of credit and equity outperformance, prompting cautious optimism in the bond market.



Read more at Daily Telegraph: Why US bonds are back in favour