November 2025
Please see below for a series of fixed income and currency macro viewpoints from Insight’s lead portfolio managers.
| Insight Spokesperson | Quote |
|
Bonnie Abdul-Aziz
Head of European Credit  |
An unusually active period should present opportunities in euro credit Despite being tested by several key events, euro credit has consistently rebounded after each sell-off – highlighting the strength of the technical backdrop and the persistence of a ‘buy-the-dip’ mentality. Although we’ve seen robust levels of issuance through 2025, we expect an unusually active year-end as issuers look to pre-fund 2026 maturities. We’re viewing this as an opportunity and will be actively seeking long-term value, particularly where new issue premiums emerge. Encouragingly, demand continues to track supply, supported by inflows into fixed maturity funds and growing optimism around German fiscal stimulus, which is buoying the 2026 outlook. |
|
Jeff Burger
Senior Portfolio Manager, Municipal Bonds Team  |
US municipal bonds are currently generating more than twice their five-year average spread over similarly rated corporate credit. In our view, this creates an attractive entry point for investors. The steepness of the yield curve provides additional opportunities for active managers to enhance returns by exploiting the gap between short- and long-term maturities. Moreover, the recent spread compression in corporate credit markets has significantly improved the relative value of municipal bonds. |
| Gareth Colesmith Head of Global Macro Research  |
We expect French government bonds to underperform in the months ahead. France is trading short-term political survival for long-term fiscal decay. Suspending pension reforms may keep the government afloat today, but it deepens the deficit and does nothing to stem the sovereign risk tomorrow. Investors may remain wary of French government bonds for some time – or at least until both political and economic stability are restored. This leaves us comfortable with an underweight in France vs other major European markets. |
|
Nate Hyde
Senior Portfolio Manager  |
Hedging foreign bonds back into US dollars is a great way to enhance yields and create new opportunities. There is a popular misconception that investing in a global bond strategy means giving up yield because markets like Europe and Japan have lower yields than the US. But when you hedge overseas bonds back into US dollars you regain the yield differential between the two countries. Taking the Japanese Yen portion of the Global Agg as an example. This yields around 1.6% in local currency terms, but this rises to 5.3% when hedged back into USD dollars on a three-month basis. That’s a meaningful yield enhancement versus the US dollar Agg which yields around 4.2%. |
| Isobel Lee Co-Head of Global Rates Investment  |
Steeper yield curves could reward investors to move out of cash and into bond markets. The European Central Bank has cut rates eight times from mid-2024 to mid-2025, and its easing cycle is probably over bar a meaningful deterioration in growth. In contrast, the US has been acting with a sense of urgency, with the Fed Funds rate expected to keep reducing rates in the months ahead. The Bank of England sits between the two – likely to edge rates gradually lower while trying to maintain the narrative that it is committed to its inflation target. We believe that steepening yield curves could incentivise investors to shift out of cash into bond markets as they seek higher yields. |
| Brendan Murphy Head of Fixed Income, North America  |
Global relative value trades could be an alternative to stretched valuations in credit markets. We expect investors to continue looking beyond US fixed income markets in 2026, but they need to pick with care. For example, a potentially developing fiscal crisis in France may justify an underweight. Similar political challenges in Japan probably warrant an underweight at the front end of the curve, although longer-dated Japanese bonds may offer some value. Global bonds will continue to offer welcome diversification to passive investors, but those able to take informed, active positions across the globe will find more pockets of value. |
| Melissa Niu Portfolio Manager  |
Deal structure and credit quality is critical when investing in digital infrastructure. In today’s tight spread environment, it’s more critical than ever to focus on how deals are structured. In digital infrastructure, robust deal construction is key to ensuring long-term resilience for our clients. We’re prioritising credits that are well-diversified, backed by high-quality assets, and thoughtfully designed to mitigate downside risks. We take a selective approach, particularly in areas where technology risk is elevated. Currently, we see yield potential in certain fiber names and carrier hotel-style co-location data centers, which typically feature high barriers to entry that supports tenant stickiness and long-term occupancy. |
| Erin Spalsbury Head of US Investment Grade Credit  |
Investors are shifting toward longer-duration risk as they position for further rate cuts. Although spreads are tight, demand for US credit has remained persistently high through the year and we’re now entering a period where seasonality should see dwindling supply. This dynamic, combined with broadly positive earnings results, leaves little on the horizon to suggest a meaningful widening in spreads in the near term. Investors appear to have been light on risk earlier in the year but have been playing catch-up, with any dips in the market being swiftly bought. Expectations of further rate cuts are encouraging investors to extend duration, locking in yields with longer-dated credit. |
| Adam Whiteley Head of Global Credit  |
The elevated level of all-in yields offer scope for both attractive income and potential capital appreciation, especially in higher-quality, non-cyclical names that are better positioned to weather volatility. With spreads at the tighter end of historical ranges, security and sector selection has rarely been more important, especially given the risks tied to US tariffs and their knock-on effects on growth and inflation. Inflation is accelerating in sectors vulnerable to tariffs, but credit spreads remain near multi-year lows and leave little cushion should macro risks materialise. That said, absolute yields remain elevated, and this continues to underpin demand for credit related funds, which continue to see inflows. A slowing economy isn’t necessarily bad for credit, as long as nominal growth stays positive. While equity returns depend on sustained profit growth, credit only requires borrowers to repay. Even modest nominal growth can support credit markets. |