Fixed Income Outlook: Staying Neutral Amid Divergent Global Signals

Schroders’ Unconstrained Fixed Income Views (Oct 2025) assesses how conflicting economic data and persistent uncertainty are shaping bond strategy across regions.

• Despite robust global growth, weak U.S. labor data has pulled Treasury yields lower, creating a mismatch between economic strength and market pricing—Schroders expects Treasuries could underperform if hiring stabilizes.

• In Europe, investor optimism may be overextended, with fragile German data and fiscal gridlock in France risking near-term disappointment; the team remains constructive on eurozone duration but cautious on semi-core markets.

• The outlook favors high-quality emerging market debt and securitized assets, while maintaining a neutral stance on global duration ahead of the UK’s November Budget and ongoing U.S. shutdown uncertainty.

Can bond investors balance cautious central banks with stretched valuations across regions? The full report explores Schroders’ latest allocation perspectives.