As US interest rates decline, assets that have accumulated in cash are poised to migrate into bond markets seeking higher returns. For those with flexible mandates, a global approach can unlock compelling relative value opportunities.
Global rates: liquidity meets opportunity
Global inflation: a highly unusual cycle
Global credit: why credit still makes sense
Global high yield: time to rethink high yield risk
Inflation is expected to diverge across major economies in 2026. The eurozone and Japan are expected to see a more benign outlook while the UK and US face persistent price pressures. This leaves the Fed and Bank of England facing a tricky outlook as they ease policy with inflation above-target.
When faced with absolute yields that are high relative to history and spreads towards the tighter end of historical ranges, we believe that for most investors yield trumps spreads. In low-growth environments, credit has typically outperformed equities, as companies are able to make debt repayments even if they are struggling to expand earnings.
High yield credit markets have undergone a significant transformation in recent years. Today’s high yield universe is characterised by improved issuer quality, more disciplined debt management, and persistently low default rates – factors that have supported tighter spreads and enhanced resilience.
Deep dive into the full 2026 outlook
Global currencies: dollar at a crossroads
The US dollar faces a pivotal year, with its recent retreat from historic highs raising questions about its future direction. Fiscal concerns and political uncertainty could reshape global asset flows and prompt investors to reassess currency exposures.
