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Covid-19 – Fixed income update briefing

29/05/2020

A periodic update of the fixed income market and economic events occurring over recent weeks and how M&G has been reacting. 

In this short summary we highlight some of the key economic events and data emerging during the Covid-19 crisis and how the leveraged loans and main government and credit markets have been performing. We also discuss some of the activity taking place in both the market and from our fund managers.

  • The US unemployment rate increased to 14.7% as more than 20 million jobs were lost in April. Other data releases for Q1 2020 and April have provided evidence of the extent of the slowdown many countries have experienced.
  • Volatility in credit markets during the crisis has allowed us to apply some of the dry powder we held in selected investment grade issuers across a range of sectors. European high yield markets, supported by central bank and government policies, have recovered significantly.
  • The first tentative signs of new issuance in the European loans market are beginning to emerge.

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