January saw a reversal of fortunes in U.S. bond markets.
January was a reversal in fortunes for U.S. bond markets that suffered record loses in December. Investor demand for corporate credit combined with restrictive bank lending prompted a flood of issuance and additional yield spread premium tightening. The specter of Greece continues to loom in the global government markets with Germany being a primary beneficiary of those seeking safety. The January optimism for economic strength faded late in the month with China's claims of a clamp down on borrowing and Washington's proposals to limit the size of banks.
To access the report, please click on this link: Morningstar Bond Market Commentary.
Sanjay Arya is director of Morningstar Indexes.