Fixed Income  

Yields fall further as fears over long-term valuations endure

This article is part of
The Guide: Fixed Income

Despite the concerns, one area of consensus among fixed income investors is renewed caution on UK assets, which Mr Iggo describes as “vulnerable” following the recent political turmoil.

“The ratings agencies are getting nervous, and further downgrades to the UK’s credit ratings are increasingly possible,” Mr Leaviss says.

Macro, currency and monetary factors will continue to dominate the fixed income arena for the remainder of the year, Mr Iggo adds. 

As hawkish comments become more prominent across the world’s three major central banks, the second half of 2017 could have more surprises in store.

Taha Lokhandwala is deputy editor of Investment Adviser

 

KEY NUMBERS

10

Number of years since the last Bank of England interest rate rise

6bps

Fall in the 10-year UK gilt yield in the 12 months since the 2016 EU referendum

48%

Chance of a US Federal Reserve rate hike to 1.5% in December 2017, according to CME Group

12%

One-year rise in the Bloomberg Global High Yield index