UBS On-Air: Market Moves
Fixed Income Conversation Corner with Ed Al-Hussainy (Columbia Threadneedle) and Leslie Falconio (UBS CIO)
Apr 15, 2025
Leslie Falconio, Head of Taxable Fixed Income Strategy for the Americas at UBS, shares insights on fixed income amidst economic uncertainty. The discussion navigates current investment landscapes, exploring cautious credit strategies and their implications on market dynamics. They emphasize the shifting relationship between equity and fixed income markets, highlighting opportunities in U.S. high yield corporate credit. Both Falconio and Ed Al-Hussainy also stress the need for a strategic approach during volatile times, steering clear of panic-driven decisions.
17:57
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Quick takeaways
- The recent shift in market conditions has led fixed income investors to cautiously reassess their strategies in response to widening credit spreads.
- Monetary policy expectations are becoming aggressive as potential Fed rate cuts loom, influenced by economic changes and evolving fiscal landscapes.
Deep dives
Market Expectations and Performance Trends
Recent market conditions have shown a significant shift in asset class performance expectations, as optimism about growth has permeated the financial landscape. The last quarter of the previous year saw a rally in various assets, including equities and treasury yields, driven by robust growth expectations. However, entering the first quarter of the current year, there was a noticeable moderation in these growth expectations, aligning with softer data from households and companies. This trend resulted in a rally in treasury yields and a decrease in equities, indicating a recalibration of market optimism concerning growth potential.
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