Bonds: Should we add Developed Market investment grade bonds now?
The surge in US government bonds yields since the September US job market report has made the risk-reward balance in Developed Market government bonds more attractive compared with a few weeks ago. We would average into the bonds as yields rise above 4%, given our expectations for the US 10-year yield to fall back towards the 3.5-3.75% range over the next three months as the Fed cuts rates.