Fixed Income

Investment Insights by our experts and thought leaders

Forbes: Why The Yen Should Not Strengthen In A Crisis

“Any major crisis in the Northeast Asian region, especially one involving a crisis within Japan’s borders, is likely to be handled very aggressively by the Bank of Japan (BOJ), with it bending the rule-book as much as the Fed did during the Global Financial Crisis or as the ECB has done in the past five years.”

John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com

Japan’s Inflation and Monetary Policy Outlook

Our Tokyo Fixed Income team explains its view on the Japanese labor market and its effect on consumer inflation and Bank of Japan policy.

“We all have heard of the term 'interest rate repression' for how central banks have kept rates at ultra-low levels, but this has only been successfully maintained due to what I call 'inflation repression.'”

John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com

Five Charts to Watch

As commodity prices have risen, the Australian economy is set to benefit from these continuing gains.

Asian Fixed Income Monthly Outlook - April 2017

US Treasury (UST) yields rose in the first half of the month buoyed by hawkish comments from the Federal Reserve (Fed), a solid US jobs report and possible scale back of quantitative easing (QE) by the European Central Bank (ECB).

House View: Continued Economic and Equity Reflation

The Global Investment Committee remains optimistic about global economy and equity markets despite their recent strong equity rallies and increased political risks.

Asian Fixed Income Monthly Outlook - March 2017

US Treasury (UST) yields traded in a tight range in February. Risk assets rallied and UST yields rose in the first half of the month, on the back of the prospect of tax cuts and a Dodd-Frank overhaul in the US.

Asia Credit - A New Major Global Asset Class

Asia’s Credit market has come a long way since the Asian Financial Crisis of 1998, having evolved into a large, deep and liquid market.

Global Fixed Income & Credit Outlook - February 2017

With President Trump announcing that he will be releasing his tax plans in the coming weeks, we have shifted to a more cautious position on US duration. The risk is that President Trump announces a sizeable stimulus package, with the backing of the broad Republican base.

Asian Fixed Income Monthly Outlook - February 2017

US Treasury (UST) yields ended higher in January as weaker-than-expected payroll data led markets to moderate their forecasts for Federal Reserve (Fed) rate hikes in 2017.

Global Fixed Income & Credit Monthly Outlook - January 2017

Credit markets are expected to have another positive year. We expect economic growth in Asia to be stable but see some potential downside risks.

A Dynamic Approach to Managing Credit Risk

Global economic, credit and interest rate cycles are becoming desynchronised. In this paper, we introduce Nikko AM’s first generation default probability model for corporates.

Asian Credit Outlook 2017

In-depth report: Economic growth in Asia is expected to remain broadly stable in 2017. While there will be greater external uncertainties as well as country-specific challenges, Asian economies are, on balance, better equipped to deal with external pressures compared to a few years back.

Emerging Market Debt Outlook 2017

Our Senior Portfolio Manager for Emerging Market Debt in London forecasts that in 2017, this asset class could well match 2016’s achievement.

Turkey on a Knife's Edge

Our London-based expert on Turkey updates his views on the precarious situation there.

Global Credit Market Outlook 2017

As rates could rise further in 2017, we expect that a broad range of investment themes will help generate enough alpha performance to offset the rates impact.

Asia Credit - A Separate Allocation

Why Asia Credit should stand alone from Global Emerging Market Debt.

Asian Fixed Income Monthly Outlook - January 2017

USTs weakened further in December, as caution prevailed following the November sell-off. As widely expected, the US Federal Reserve (Fed) raised interest rates by 25 basis points (bps).

House View: Bullish on Global Equities and the USD in 2017

Nikko AM's Global Investment Committee's 2017 Outlook — More Economic and Equity Reflation, Despite Less Dovish Central Banks

How Trump seals China’s policy trilemma

Our China Fixed Income expert in Singapore expounds upon how the Trump election is forcing China into taking specific economic policies.

Asian Fixed Income Monthly Outlook - December 2016

UST yields surged in the month as Trump's election victory prompted expectations of a significant fiscal package and possible upside inflation risk under the new administration.

Five Charts to Keep an Eye On – Making sense of this unique investment environment

Following the US election, we have seen bond rates continuing to increase, a stronger US dollar, firmer commodity prices, and a US stock market at all-time highs. Is optimism around the US President-elect’s fiscal expansion masking the true deflationary picture?

Italian Referendum: Nikko AM Europe Fixed Income Commentary

We expect Italian assets to underperform until it becomes clear who will be able to form and lead a new government. Nevertheless the outcome of the referendum was already priced into financial markets.

Global Fixed Income & Credit Outlook - November 2016

October was another difficult month for Global credit markets, in particular for Investment Grade bonds. By contrast, more risky High Yield bonds outperformed.

Trump Win: Surprise, but Not an Accident

Neither Brexit nor Trump’s win was an accident – ‘the people’, in particular the working and middle classes, are purposefully and deliberately giving the political elites a thump on the nose.

Asian Fixed Income Monthly Outlook - November 2016

USTs ended lower in October. Better US economic data and a hawkish statement from the Federal Open Market Committee (FOMC) bolstered expectations of a December interest rate hike.

Asian Fixed Income Monthly Outlook - October 2016

USTs ended September mixed. While the Federal Reserve left interest rates unchanged and the Bank of Japan reinforced commitment to monetary easing, the ECB's lack of new stimulus disappointed the market.

It has continued to be a wild roller-coaster ride for investors, and unfortunately, it is not likely to be very calm for the foreseeable future. Investors must keep a keen eye on geopolitical risk and be ready to act if such appear to accelerate into a situation that could significantly impact markets.

Only central banks can break the cycle of ever-declining bond yields

QE policies have had a material impact on bond yields and valuations. We believe that the evolution of these policies will be more important than fundamentals in indicating when bonds can break the cycle of ever-declining yields.

Global Fixed Income & Credit Outlook - September 2016

Central bank policy from the US, Japan and Europe are strongly affecting the current global fixed income markets. New Zealand and Canadian economies also face continued pressure.

Asian Fixed Income Monthly Outlook - September 2016

USTs ended marginally lower in August as the market adjusted to the possibility of a Fed rate hike, buoyed by sustained resilience in the labour market.

Is this the end of the 35-year bond rally?

Many market commentators have been speculating that we are finally coming to the end of the bond rally that has endured for the past 35 years. It's worth noting that this is nothing new—we have heard similar suggestions many times before over recent years.

Global Fixed Income & Credit Outlook - August 2016

In developed markets, global bonds have benefited from recent flows out of Japan into positive-yielding markets. The New Zealand and Canadian economies face continued pressure and a September US rate rise is now looking more unlikely.

Asian Fixed Income Monthly Outlook - August 2016

US Treasury (UST) yields ended July mixed: yields of shorter maturities climbed, whilse those of longer maturities fell.

Global Fixed Income & Credit Outlook - July 2016

The major consideration for markets in June was the Brexit vote in the UK. Although we are sceptical about the most pessimistic scenarios for the UK, there will be some negative impact on growth.

Asian Fixed Income Monthly Outlook - July 2016

US Treasury (UST) yields gained in a volatile mon across asset classes. The US Federal Reserve (Fed) scaled back projections for raising interest rates, while the UK voted to leave the EU by a 4% margin, surprising markets.

Attraction of Emerging Market Debt

Emerging Market reforms won't stop or pause with the current market recovery.

What does Brexit mean for Emerging Markets?

Following our analysis of the recent UK vote, our Emerging Market debt team in London discusses Brexit's potential ramifications for this asset class.

Brexit - Asian Fixed Income Update

The immediate fallout from the Brexit win has been a strong flight to safety. US Treasuries rallied with the UST 10-year yield down to 1.44%, lower by 31 basis points (bps) on 27 June 2016.

Brexit: Outlook for Global Fixed Income & Credit

Uncertainty after Brexit vote, but the correction in valuations and market volatility could provide buying opportunities in some fundamentally strong credits.

Brexit: Where to now for markets?

Although it is still too early to determine the full implications of Brexit over the longer term, in the short term, we can expect significant market volatility as uncertainty prevails, but this does not mean that investors should panic.

Asian Fixed Income Monthly Outlook - June 2016

US Treasury yields remained largely unchanged in May. The impact of a disappointing US payroll figure was offset by the release of the US Federal Reserve’s April meeting minutes, which revealed that most policymakers favoured a rate hike in June should the US economy continue to improve.

Global Fixed Income & Credit Outlook - June 2016

Continued easy monetary policy in Europe and Japan will be supportive for global interest rates, but the case for further limited rate hikes in the US remains in place for 2016.

Global Oil Update: Continuing positive outlook or flash in the pan?

Our oil experts in London and New York update their bullish views in January with new facts, while retaining their positive intermediate-term view on oil prices.

Fed rate rise most likely in September, but could be delayed until 2017

Our global rates and currencies strategist in Australia lays out his dovish Fed scenario as an alternative to our house view. In it, he expects the Fed to wait until September or later to raise rates, and states his case that the Fed’s actions do not affect US bond yields.

Asian Fixed Income Monthly Outlook - May 2016

US Treasury (UST) yields rose in April, as hopes of stabilization in the Chinese economy underpinned demand for riskier assets.

Abenomics is Alive and Well

Our Chief Global Strategist explains the reasons why there is too much unjustified pessimism about Abenomics.

The Subtle Shift in Asian Currencies from the Dollar to the Renminbi

Our Asian currency expert discusses the potential ramifications of the increasing CNY-orientation for Asian currencies.

Which Matters More for Credit Spreads: Fundamentals or QE?

What is more important for credit spreads in the current environment: the fundamentals or central bank actions? Our research suggests that since 2010 the answer has been central banks and, in particular, the US Federal Reserve.

Global Credit Outlook

For the next 12 months, we are quite positive on performance prospect for global credit, singling out five investment themes.

Disruptive Innovation

Multi Asset Strategies to Capture Growth with Lower Volatility

The changing shape of China's economy