European high yield faces headwinds from higher borrowing costs and a more challenging earnings outlook, but strong technical factors and steady yields are bolstering resilience ahead of significant upcoming market events.

What does this mean for fixed income investors?

We remain tactically cautious on certain cyclical sectors as we approach the third-quarter earnings season and the US elections in November. However, we think that the impact of central bank rate cuts on short-term yields and the seasonal abatement of primary supply will further strengthen robust technicals into the fourth quarter. As a result, any dip in the market is likely to be a buying opportunity. 

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.



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