Jobs slowdown fuels fixed income rally

There was little reaction to the Federal Reserve holding interest rates at 4.5% last week. Jerome Powell defended this decision and argued that the US labour market was in a strong position. The following day, weak labour market data lowered bond yields and sparked a fixed income rally. Lower net job creation data has increased the likelihood of a rate cut next month. On the back of this data, the US 2-year and 10-year yields fell by 24 bps and 17 bps, respectively. Despite President Trump’s latest tariff announcements, European high-yield credit ended July with a +1.2% return for the month,...