Risk-on or risk-off? Bond investors react after volatile April

Calling last month “volatile” is nothing short of an understatement. The US administration’s monumental trade tariffs caused a market sell-off, although a pause in these measures led to a recovery in equity markets. Markets initially reacted to tariffs with a risk-off approach, reducing US treasury yields. Hedge funds came to the rescue and as they unwound basis trades, yields surged; this most likely caused Trump to announce his 90-day freeze. Investors currently continue to move away from dollar assets due to political uncertainty. After weeks of outflows, European and US credit funds saw...