Volatility on interest rates remained elevated during October. However, the market is starting to believe that we might have reached peak interest rates. Inflation remains too high but has been easing. Spreads on our securities widened during the month, despite the extremely strong credit fundamentals of our companies.
September was once again a month where we saw significant volatility on interest rates, as the higher for longer theme remains very much present. Inflation has been easing, but it remains too high for central banks and macroeconomic data remains resilient. Higher oil prices also contributed to higher interest rates. Spreads on our securities widened slightly during the month.
The month of August was softer for our securities. Inflation continues going down but remains too high for the central banks. Spreads on the subordinated debt of financials widened during the month and remain at very wide levels.
Sentiment was strong in July. The theme of disinflation coupled with a soft landing made a comeback during the month. This was partially linked to the lower-than-expected inflation prints that we saw within the US and the UK. This meant that we saw spreads in general tighten, and more so within subordinated financial debt, to the benefit of securities we hold.
Markets in June were characterised by the higher interest rates for longer theme following a number of macroeconomic data releases. As such, we saw some strong moves upwards in government bond rates, most notably among short-dated rates as seen in the two-year rates moves.
We saw calmer markets in April, following the
strong volatility we experienced in March. The
direction of markets seems to be largely guided
by the upcoming central bank meetings and future