Global fixed income enjoyed a relief rally this week as cooling inflation data and a temporary reprieve on tariffs bolstered sentiment, while major central banks reaffirmed a patient, data-driven policy stance.

Rate markets were shaken this week by rising concerns over U.S. fiscal discipline and renewed tariff threats, prompting a sharp adjustment in Fed rate cut expectations and putting long-end yields and credit under renewed pressure.

Long-end yields rose across developed markets, led by Japan’s 30-year breakout to a 25-year high, while cautious central bank messaging and supportive credit dynamics helped sustain risk appetite across fixed income.

Global fixed income markets found stability last week amid easing U.S.–China trade tensions, while Japan's 30-year government bond yield surged to a 25-year high, reflecting shifting investor sentiment and inflation expectations.

Falling volatility has supported a rebound in global fixed income markets, yet persistent macro uncertainty—centered on trade tensions, political interference, and diverging policy paths—continues to cloud the outlook.

After weeks of volatility, global fixed income markets stabilized, supported by easing yields and central bank signals, while regional divergences and trade policy developments continue to shape investor sentiment.

Volatility returned across fixed income markets last week as soft economic data, rising inflation expectations, and looming U.S. tariffs forced central banks into cautious mode — with rate expectations shifting, credit spreads widening, and high yield flashing early signs of stress.

Volatility returned across fixed income markets last week as soft economic data, rising inflation expectations, and looming U.S. tariffs forced central banks into cautious mode — with rate expectations shifting, credit spreads widening, and high yield flashing early signs of stress.

Amid dovish signals from the Fed and an expected SNB rate cut, bond markets diverged —European yields surged on fiscal expansion, Japanese long bonds hit historic highs, and EM resilience was tested by political and inflationary shocks.

Rising policy uncertainty is shaking up global fixed income markets—U.S. high-yield spreads surpass Europe for the first time since 2021, German yields surge on fiscal expansion, and central banks face tough choices amid inflation risks and slowing growth