Janus Henderson: Thoughts and bonds - dealing with divergence
‘Thoughts and bonds’ provides a quarterly view and outlook for the fixed income markets from the Fundamental Fixed Income team at Janus Henderson, where they share their insights on potential investment risks and opportunities.02.08.2018 | 13:25 Uhr
Key takeaways:
- Our current thesis is threefold: the US Treasury curve will continue to flatten; divergence in credit markets will persist with high yield outperforming, and credit curves will continue to steepen.
- US Federal Reserve (Fed) rate hikes, diminishing demand for Treasuries and increasing supply should drive US rates higher. The Fed’s stable long-term outlook will likely keep longer-dated yields range-bound, leading to a flatter curve.
- We expect the strength in corporate fundamentals to continue. However, merger and acquisition activity, rich valuations and rising rates amid the latter stages of the credit cycle warrant a cautious outlook on corporate credit.
For the Q3 2018 issue please click here: Dealing with divergence