Why investors should expect further deterioration in bond prospects

Carlos Daurignac, a global macro strategist at H20 Asset Management, gives his outlook for the fixed income market for the rest of 2015 and beyond.

The monetary policy of the Federal Reserve has taken centre-stage in the fixed income market after September's postponing of the first rate rise in nine years. Why have investors been so wrong about gilts? This followed a bout of volatility generated by the unexpected relaxation of the Chinese exchange rate and fears of a global commodity slump. It took one month to figure out whether China had embarked on active competitive devaluation or simply reacted to a localised tension in its balance of payments. Our view is the truth falls somewhere in the middle, allowing for volatilit...