Know What's Happening in Bonds
Know What's Happening in Bonds
Japan’s ultra‑loose policy fuels $435 billion yen‑funded carry trade, raising bond market risk
The Bank of Japan’s ultra‑loose stance has made the yen the world’s cheapest funding currency, enabling a carry‑trade that amassed roughly $435 billion between 2022 and 2024. A modest rate hike in March 2024 barely dented the trade, but markets remain wary that a sudden, aggressive tightening could compress spreads and force borrowers to repay yen‑denominated debt.
IDB Invest and French development finance firm Proparco are jointly investing $100 million in a Colombian‑peso‑denominated bond issued by Millicom International Cellular. Each institution will anchor $50 million, financing network upgrades across Bolivia, Colombia, El Salvador, Guatemala, Honduras, Panama and Paraguay. The proceeds will support Millicom’s rollout of 4G, 4.5G, 5G and fiber‑optic infrastructure, expanding affordable broadband for millions. The deal underscores growing development‑finance involvement as Latin America’s data traffic is expected to triple by 2030.
In this episode of Credit Crunch, Goldman Sachs’ global co‑head of high yield and bank loans, John McClain, discusses the current state of the below‑investment‑grade market, noting that high‑yield spreads have stabilized in the low‑300 bps range and that double‑B issuers are...
Goldman Sachs Asset Management’s high‑yield co‑head John McClain says the post‑COVID high‑yield market remains robust, with scarce new issuance, minimal downgrades and strong investor demand anchored by elevated base rates. Credit spreads are holding at reasonable levels, reflecting solid underlying...
The U.S. Treasury yield curve, which has been flattening throughout 2026, showed a modest steepening on Friday as the 5‑year note held at 4.07% and the 30‑year bond nudged up to 4.98% by market close. The move came after bullish...
Treasury yields slipped as President Trump hinted at progress in peace talks and investors turned to upcoming labor data. The 10‑year yield fell to about 4.37% and the two‑year to 3.86% early, later adjusting to roughly 4.40% and 3.89% per...
U.S. economic data released this week showed fourth‑quarter GDP growth revised down to 0.7% and consumer‑price inflation still running above 3% in January. Combined with soaring oil prices and rising Treasury yields, analysts warn the economy may be slipping into...
Bank of America technical analyst Paul Ciana warns that the second quarter will be challenging for equities, bonds and gold. He sees the S&P 500 in a downtrend with downside targets at 6,340, 6,175 and 6,000 and resistance near 6,810....
Tudor Investment Corp boosted its stake in the iShares Core U.S. Aggregate Bond ETF (AGG) by 83.2% in the third quarter, adding 6,423 shares for a total of 14,142 shares worth roughly $1.42 million. The move follows a wave of new...
From Waterloo to the Iran conflict, the pattern hasn't changed. When governments go to war, bondholders pay. New research from Northwestern, Stanford, Columbia and UT Austin: 300 years of data, 14% average real losses in the first four years of war....
POWELL: INFLATION EXPECTATIONS REMAIN WELL ANCHORED - Bloomberg. *Inflation expectations (breakevens), below. "Well anchored?" https://t.co/oWnwOzgMcY
New York City Comptroller Mark D. Levine defended a roughly $2.3 billion municipal bond issuance, rejecting the narrative that Mayor Zohran Mamdani's budget plan scared off investors. He blamed broader market volatility and rising yields, while rating agencies moved to a...
Cuts winning out vs hikes now. Market net pricing 5 bps of cuts this year https://t.co/jSHybRo8Ni
Junk credit spreads are certainly widening, but if this is going to become a meaningful move, we are not even out of the first inning. https://t.co/KwASCn8uAh
Former President Donald Trump is demanding a federal funds rate near 1% as the Iran war disrupts oil flows, intensifying a feud with Fed Chair Jerome Powell just before the next U.S. inflation report. The standoff threatens to reshape equity...
Credit markets are shaped by dislocations, liquidity, and risk. Kieran Goodwin of Saba Capital speaks to three decades in credit, risks in private credit, and positioning for stress. https://t.co/oiutNgtCW9 With thanks to @AlphaSenseInc, @MorningstarInc, and Ridgeline.
Fed funds futures mostly back to "normal" as the near term rate hike gets priced out. Live chart vs last Thurs. https://t.co/F0dnQCJ9pu
Zenkyoren, Japan’s agricultural mutual insurer, is pursuing mid‑guidance pricing of 2.1% for its $100 million Nakama Re 2026‑1 catastrophe bond, a slight reduction from the original 1.9‑2.4% spread range. The bond provides fully‑collateralized earthquake reinsurance covering losses from an attachment point...
David Kang argues that Los Angeles institutions must reassess long‑standing bond assumptions as market conditions evolve. Decades of low volatility and steady monetary policy gave way to wider non‑directional interest‑rate swings, challenging traditional duration‑heavy, long‑end allocations. Liquidity, once taken for granted,...
Recent record‑breaking corporate bond issuance, led by Amazon, has shrunk capital‑raising windows from weeks to mere hours. The speed of credit markets now hinges on rapid interpretation of massive data flows, yet many firms still rely on outdated terminals and...
The Bank of Mexico voted 3-2 to cut its benchmark rate by 25 basis points to 6.75%, prompting the peso to slip past 18 per U.S. dollar for the first time since December. The move came as inflation hit 4.63%...
U.S. equity markets posted a fifth consecutive week of losses as Treasury yields surged amid heightened Iran tensions. The market slump marks the longest losing streak in nearly four years, underscoring how geopolitical risk is reshaping bond and stock dynamics.
U.S. mortgage rates have jumped sharply, creating a major obstacle for the spring home‑buying season. The rise is tied to higher Treasury yields as geopolitical tensions lift oil prices and weigh on global bond markets.
Kevin Muir’s second "Catching up with Kev" column links a rare VIX inversion to a surge in bond buying, highlights Japan’s monetary tightening, and dissects JPMorgan’s massive options position that’s reshaping market dynamics. He notes that the VIX’s short‑term contract...
JPMorgan Chase’s head strategist publicly dismissed market speculation that the Federal Reserve will lower rates in the second half of 2026. The warning aims to curb premature corporate financing moves and recalibrate FP&A forecasts across the economy.
US commercial mortgage‑backed securities (CMBS) are showing localized repayment activity after a period of muted performance. Structured‑credit executives highlighted that specific asset classes, such as retail and multifamily properties, are seeing improved cash‑flow and lower delinquency rates. The article notes...
The article highlights a sharp rise in US Treasury yields after an inflation shock tied to the closure of the Strait of Hormuz. The 10‑year note closed at 4.44%, and analysts warn that a move toward 5% would confirm fears...
The iShares National Muni Bond ETF (MUB) delivered a 3.7% five‑year total return, outpacing the Vanguard Intermediate‑Term Treasury ETF (VGIT)’s 0.8% gain. While VGIT’s 0.03% lower expense ratio and marginally higher yield appeal to income‑focused investors, MUB’s 6,300‑plus municipal holdings...
Fannie Mae and Freddie Mac increased agency MBS holdings by about $11.3 billion in February, the smallest rise since September 2025 and well below the $15.5 billion jump in January. The increase falls short of the White House’s January pledge for the...
JPMorgan and asset manager Pimco warned that the bond market is downplaying the risk of a sharp economic slowdown triggered by the ongoing US‑Iran conflict. Crude oil has surged past $110 a barrel, intensifying inflation pressures. Traders have largely fixated...
Bond markets have rapidly repriced near-term expectations for U.S. inflation in response to surging commodity prices. The implied 1-year breakeven inflation rate is now above 5% for the first time since 2022. Elevated bond market-implied inflation expectations may present a problem...
Guggenheim Strategic Opportunities Fund (GOF) now yields about 20.6% annualized, trading at $10.61 per share—a near‑zero discount to its $10.64 NAV. After five years of premiums that topped 36%, the premium has collapsed, offering investors a price‑aligned entry point. The...
In the first quarter, Gulf region debt markets posted a flat to –1% performance, while equities managed a modest sub‑5% gain. The local equity index, previously buoyed by a decade‑high optimism, fell sharply after the dollar’s 10% decline against emerging‑market...
The most correlated macro data that explains the 10-2 yield curve is the unemployment rate. Why? The short end drives most of the movements in the curve, and employment heavily influences the short end via Fed policy. This relationship goes...
Phase 2 - the return of pre-Covid risk off behavior as volatility explodes and credit spreads finally widen.
British government bonds suffered the steepest price drops in the latest worldwide bond rout, with 10‑year gilt yields jumping to 5% after the Bank of England kept its policy rate at 3.75%. Analysts link the sell‑off to the BOE’s stance,...
Sobering new read: Liability management maneuvers (LME) often fail to protect L-T value. Per @FitchRatings firms that undertook LMEs btw 2016 & H1 2025 before filing bankruptcy experienced recoveries for first-lien debt of ~39% vs recoveries of ~68% for firms w/o...
My take in @asiatimesonline on US debt: “The US gov't is insolvent. That’s not hyperbole — it’s the conclusion drawn directly from the Treasury Department’s own consolidated financial statements for fiscal year 2025, which was released last week to near-total media silence.”...
Markets have shifted from expecting Federal Reserve cuts to pricing in rate hikes for 2026. The CME FedWatch Tool now shows about a 30% chance rates will end the year higher than the current 3.50‑3.75% range, while odds of cuts...
Yes, indeed. 10-year yields are higher. Oil is materially higher. On the deficits side: I’m old enough to remember DOGE… https://t.co/9uWJASUd8q https://t.co/K8XMoJFshw
Sec. Bessent, February 2025: "Judge us by the 10y UST yield." 10y UST yield (blue, RS) v. oil, since Bessent said that 👇 "3 Arrows" about to turn into "0-for-3 Arrows": https://t.co/goqhygmgv6
Emerging‑market assets have entered their steepest monthly decline since 2022, with stocks down about 10% and local‑currency bond yields at two‑year highs. Asset managers TT International and AllianceBernstein are buying beaten‑down EM bonds, betting that central banks will cut rates...
"bonds—often a place of safety in times of market turmoil—have offered no relief, hit by worries that resurgent inflation will keep interest rates higher than expected and undermine the value of their fixed payouts." https://t.co/acyJLqVIXP https://t.co/7yOQbeNrn2
Powell out in May. Warsh in. Market is pricing hikes. New chair may cut. The wildcard nobody's discussing: what if the Fed pivots just as inflation re-accelerates? One transition. Two completely different outcomes. $SPY $TLT https://t.co/zmsbBtchWk
State Street’s SPDR Portfolio Aggregate Bond ETF (SPAB) has earned a buy rating as its yield‑to‑maturity climbs to roughly 4.7%, outpacing money‑market and Treasury rates by about 1.1 percentage points. The fund offers low‑cost, diversified exposure to high‑grade U.S. investment‑grade...
No major inflation scare yet... 1yr inflation swap only about 3%.. not alarming by historical trends Torsten at Apollo https://t.co/YfD4ihEjtb
2Y yield: 3.89%. 5Y yield: crossed 4%. Everyone was positioned for rate cuts. Everyone was wrong. Bloomberg calls it the biggest positioning squeeze in years. The bond market just delivered a reality check. $TLT $IEF https://t.co/jyYH8ebPrR
The U.S. Treasury reported tepid demand for its latest 2‑, 5‑ and 7‑year note auctions, pushing yields higher as the government prepares to roll over roughly $10 trillion of maturing debt. Analysts warn the shortfall could spill over into corporate borrowing...
3m10y yield spread 71bps... highest since July 2022... time to step out on the duration-risk curve? $AGG https://t.co/ozSwbxzLA4
Eurozone borrowing costs soar on fears of fiscal hit from Iran shock via @FT https://t.co/QuVa5RF5wm
