Market updates

Amid tariffs, bankruptcies, and uncertainty, credit fundamentals remain strong. Elevated yields and solid corporate balance sheets favour income-focused fixed income strategies over government bonds, even as volatility persists.

Oil prices have been gathering headlines in the last few weeks. After falling below the $60 per barrel mark, the West Texas Intermediate price (WTI) bounced back strongly as a result of fresh sanctions announced against the two Russian giants, Lukoil and Rosneft.

As we begin the final stretch of 2025, market conditions appear challenging. Inflation remains sticky across a range of economies, preventing major central banks from enacting rapid rate cuts to support GDP growth.

Amidst an economic data blackout caused by the US government shutdown, markets received a bit of positive news on Friday with the release of the US CPI report which showed consumer prices in September increased at a slower pace than expected.

Earlier this month, we wrote about the high cost of staying in cash in the Euro market. In that note, we argued that a combination of inflation, low front-end rates and steeper curves, favoured a rotation out of cash and cash like instruments into other alternatives that delivered better real returns, including credit. Building on this argument, we wanted to extend this perspective to the US dollar market and highlight a few key points.

The labour market in the UK continues to cool off along the lines of what the Bank of England (BoE) expects. Yesterday, the Office for National Statistics (ONS), released its monthly labour market data report, highlighting a rise in the unemployment rate and a reduction in some wage inflation measures.

In our latest Multi-Sector Bond quarterly update, Jakub Lichwa, Portfolio Management, discusses why we retain a favourable view on credit despite tighter spreads.

In our latest Asset-Backed Securities (ABS) quarterly update, Aza Teeuwen, Partner and Co-Head of ABS, explains how strong CLO issuance, robust investor demand and tightening spreads have driven a standout year for the European ABS market.

As fixed income investors face inflation surprises, tariff rhetoric and growing concerns around central bank independence, Gordon Shannon, Partner and Co-Head of Investment Grade, explains why the focus remains on resilience.

The sharp sell-off in loans tied to First Brands Group, a US auto-parts supplier, has rippled through credit markets in recent weeks — but for investors' outstanding senior secured loans held in Collateralised Loan Obligations (CLOs), the damage appears modest and distinct from reported off balance sheet financings.

France is in the news again. Prime Minister Lecornu became the latest casualty of the French politics saga that began just over a year ago when president Macron called a surprise early election.

Tight spreads and elevated supply are often key signs that fixed income markets are overheating. Despite these all being present within the European High Yield market today, the underlying data points to a more measured backdrop characterised by the printing of high-quality new issues, improving credit fundamentals and a stubbornly supportive technical background, offering investors reassurance over the medium-term future of the asset class.

In November 2023, we estimated that holding cash, as opposed to staying invested, could cost investors 10-30% over a three-year period. At the time, we highlighted that interest rates had reached their cyclical peaks and were likely to decrease from that point.

Oracle priced an $18bn six-tranche (5yr/7yr/10yr/20yr/30yr/40yr) bond deal which was increased from an initial $15bn on the back of exceptionally strong demand. It is the latest sign that the AI investment boom, long the focus of equity markets, is now spilling into credit.

Following the end of quantitative easing in 2023, the European ABS market has gone from strength to strength and 2025 is set to overtake the post-2008 new issuance record set in 2024.

The Federal Reserve (Fed) cut interest rates by 25 basis points (bp) on Wednesday, exactly as markets had anticipated, marking its first rate reduction since December 2024.

As active managers we are naturally looking for bonds that we believe are mispriced, therefore offering attractive risk-adjusted carry or, sometimes, a capital gain if market pricing falls into line with our view. Equally important is to avoid sectors facing structural or protracted cyclical downturns where we don’t think valuations reflect the fundamentals.

A trio of rating upgrades in European financials late last week has highlighted the strength of fundamentals in the sector. With the proportion of the subordinated financials that is rated investment grade continuing to grow, the wider pool of investors targeting these bonds could help to dampen volatility in the asset class.

Job creation, or rather a lack of it, has been in the spotlight recently as weak non-farm payrolls data in the US has driven a rally in government bonds and strengthened market projections for rate cuts.

Felipe Villarroel delivered the keynote address at TwentyFour Asset Management’s Annual Conference in London on September 9, 2025.

The next few days could be pivotal to any concerns around the independence of the US Federal Reserve (Fed).

The European Central Bank (ECB) is reportedly accelerating its work on a digital version of the euro (the dEuro), having seen the US pass the Genius Act in July which paved the way for broader adoption of so-called stablecoins.

The $5.2tr asset-backed finance (ABF) market represents a growing opportunity to gain exposure to high quality loan pools and the returns they can generate.

We have long harked on about the strength of the technical in credit, with solid fundamentals, resilient inflows and defensive positioning continuing to provide a tailwind for the market.