Investors are beginning to see value once again in fixed-income assets with bonds across the $63 trillion global debt market experiencing a bounce back.
According to Bloomberg indexes, global investment-grade debt has returned almost 1% in May, the first monthly gain since July, while US Treasuries are heading for their best month since November.
A gauge of global corporate debt is set for its biggest advance since July, while emerging-market sovereigns from Mexico to Malaysia are also in the green.
Investors attribute the recovery to a variety of reasons including how the global economy is in danger of recession, speculation the rush of central-bank interest-rate hikes are now largely priced in, and the fact yields have risen enough to make them attractive.
Bloomberg reports asset managers including pension funds and insurers last week ramped up bullish wagers on Treasuries to the highest levels since April 2020. At the same time, JPMorgan Asset Management, Morgan Stanley and Pacific Investment Management Co. have said the worst of the global debt selloff looks to be over.
Bloomberg reports the rally in bonds has already pushed U.S. 10-year yields down to 2.74% from a three-year high of 3.20% set in early May. Yields on similar-maturity German bunds have dropped to 1.06% from a peak of 1.19% three weeks ago.
