Where now for fixed income?

ON BONDS

Two years into the European debt crisis, the region is still dominating headlines and remains the driving factor behind most market movements. June proved to be another volatile ride for many investors.

Government bond markets were punished after a fantastic performance in May and corporate bond markets trended somewhat stronger, but with sharp inter-weekly moves. Meanwhile, at the forefront of the current euro crisis, Spanish and Italian government bonds whipsawed in a vicious 100bp range. The moves in Spain have been particularly wild. An accelerating sell-off over concerns of the potential costs of a banking crisis turned into a rally for a few hours on the news of a €100bn loan – before selling off again as the market realised the debt would go onto the sovereign balance sheet. T...