Entering February, the fixed income allocation strategy is overweight U.S. Investment Grade Corporate, Emerging Market Bonds, U.S. High Yield, and Mortgage-Backed Securities while being underweight Floating Rate Notes, International Investment Grade bonds, Treasury Inflation-Protected Securities, and U.S. Long-Term Treasurys.

Click the link below to read more about the strategy’s positioning.

Full strategy commentary: NDRFIAS202302031

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Trump’s WEF Address, Earnings Season Continues

BY TEMATICA
January Flash PMI data coming up and how it may impact next week's Fed policy meeting Read more →

Thoughts From the Divide:  Subjest to Change

BY JON WEBB
As the saying goes, “needs must when the devil drives”. We have no problem understanding the Fed’s decision to announce (at 7pm last night) that the details of the BTFP program needed to be altered. The problem was the overly juicy arbitrage, whereby banks could use the BTFP window to flip cash from the Fed into the RRP and pocket the not-insubstantial difference. We were impressed by the chutzpah involved in arbitraging two Fed facilities! Read more →

Whither US Treasuries?

BY JON WEBB
US growth dynamics remain stronger than many expected. The Federal Reserve seem hell bent on cutting rates but are getting cold comfort from recent data releases, however they attempt to spin it. Recent “off-message” comments from Fed officials underline that risk. If we continue in this vein, expect US rates to ratchet higher and bonds to remain vulnerable. Read more →
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