UK

UK government bond yields have pushed higher this month as markets have digested a building political crisis, with the prime minister, Sir Keir Starmer, now set to face a Labour Party leadership contest following dire local election results on May 7.

It is the nature of financial markets that the trends and risks investors have their eye on at the start of the year are seldom the trends and risks they have their eye on by the end. Below is a selection of charts depicting some key trends we have seen develop in 2025, all of which we believe will have implications for investors heading into 2026.

October brought the first serious bout of volatility in corporate bond markets for some time, with two high-profile US bankruptcies raising fears of a more systemic issue in credit.

France’s chronic government paralysis repeatedly created headlines this month, and fixed income markets are rightly worried about the sustainability of French government borrowing levels. Meanwhile, forecasts of a £50bn blackhole in the UK’s public finances are keeping gilt yields elevated and have made this November’s UK Budget a potential flashpoint.

With much fanfare, President Trump and Prime Minister Starmer announced a “historic” trade deal between the US and UK on Thursday. The main points for the UK are a reduction in auto tariffs from 27.5% to 10% for the first 100,000 cars that enter the US, and the removal of steel and aluminium tariffs.

Given modest interest rate cut projections, a stable if not stellar macro backdrop and better relative value than corporate credit, we think European ABS investors can expect another strong year of supply and returns in 2025.

Eu égard au contexte macroéconomique de la baisse des taux et de la solidité de la croissance mondiale, Eoin Walsh, de TwentyFour Asset Management, estime que les investisseurs en obligations peuvent miser sur des rendements totaux élevés en 2025.

With elevated yields and inflation expected to come back to target, we think investors can target a level of real return that was extremely difficult to achieve in the previous cycle.

Watch our livestream where Andrew Jackson, Head Fixed Income and Eoin Walsh, Partner & Portfolio Manager TwentyFour Asset Management delve into the current bond market landscape.

Avec l’apparition de fissures dans l’économie américaine, nombreux sont ceux qui se demandent si le resserrement des spreads des obligations d’entreprises ne fragilise pas les investisseurs. Les bilans des entreprises restant solides et les rendements des obligations de qualité supérieure intéressants, maintenir ses investissements dans le crédit devrait rester profitable aux investisseurs.

It feels as though market news hasn’t taken a holiday so far this summer. From the US on Wednesday we got the minutes of the Federal Reserve’s (Fed) July 30-31 policy meeting, and revisions to a whole year of non-farm payrolls (NFP) data from the Bureau of Labour Statistics (BLS).

For any fixed income investors that follow the England football team, the plan for H2 2024 may feel somewhat familiar – no substitutions in the second half.