November 2018 - Growing market expectations for a dovish Fed in December - Tactical Fund Manager's Comments

11 December 2018

Cédric Daras, Clement Perrette, David Fung, Gilles Pradère, Olivier Mulin

Convertibles Europe 

Global Bond Total Return 

Asia Bond Total Return


Growing market expectations for a dovish Fed in December


In November, markets remained volatile due to incoming macroeconomic figures, the political noise around Brexit, trade war tensions and the Italian budget situation. The latest macroeconomic figures showed some deceleration in Europe, while the US ones seem to resist better in this environment bit. However, it shed some concerns as to economic cycle having reached an inflection point. In this context, the yield on the 10yr US Treasury closed below the 3% mark, which was referred by some market pundits as a technically important level. The 10yr German bund followed course with additional political tensions stemming from the Brexit front and the ongoing Italian political situation. On the credit front, in Europe and the US, both IG and HY delivered a negative performance. Finally, EM hard currency bonds drew a mixed picture, with Asia being positive and EMEA/LatAm closing the month in negative territory.