Let bonds carry you in 2024

THIS year is looking to be a year of gradual recovery for bond markets. In the first six months, performances across most major markets were largely positive, helped by the narrowing of credit spreads, which has offset the drag from higher treasury yields around the world.

Global macro data remained resilient in H1 2024, illuminating a soft-landing outcome that has supported investors’ confidence in credit markets. At the same time, juicy yields in a higher-for-longer rates backdrop continue to lure investors to credit markets. Helped by strong investor demand, credit spreads were compressed in the past six months, fuelling the returns of major bond markets.

As we enter the second half of 2024, we expect the backdrop to remain supportive for bond markets. While valuations have tightened across major markets, we continue to see pockets of opportunities, mainly across short-duration and higher-quality bonds.