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The Bloomberg Global Agg. Bond index, which is composed of corporate and government bonds, experienced with a decline of -11.6% year-to-date by far the worst performance on record! The losing run came only to a halt in mid-May with a loss of -12.4% and recovered only slightly since then. The chart in the monthly spotlight

Yields of US short term low grade bonds broke through the 10-years average of 5.7% and reached a level of 6.9%. Since the Fed signalled a faster pace of interest rate increases in the coming months, investors divested longer term bonds in favour of their shorter term counterparts. The yield curve steepening by more than

In macro-finance, it is well known that an inverted yield curve is signaling a recession or at the very minimum, it is indicating that the economy is operating in a late cycle. For example, the 2-year/10-year Treasury slope has inverted in advance of 7 of the past 8 recession periods. However, it is a less