Implications for Fixed Income Investors
The first week of 2026 has sent a clear signal: investors are seeking yield with a preference for securities lower down the capital structure. We continue to favour high carry, intermediate duration credits, and sectors with clear tailwinds. We maintain an overweight to the banking sector, where profitability and credit metrics are strong, and see room for continued outperformance vs. the overall index. We remain cautious on chemicals, consumer staples, and food & beverage, where spreads do not fully compensate for sector risks.
As the year progresses, we expect IG credit to continue performing, with the US outperforming Europe on the margin. We anticipate positive carry-led outcomes and a market well-positioned to absorb elevated supply while rewarding issuers offering attractive yields.
About the Bond Bulletin
Each week J.P. Morgan Asset Management's Global Fixed Income, Currency and Commodities group reviews key issues for bond investors through the lens of its common Fundamental, Quantitative Valuation and Technical (FQT) research framework.
Our common research language based on Fundamental, Quantitative Valuation and Technical analysis provides a framework for comparing research across fixed income sectors and allows for the global integration of investment ideas.
