Sentiment flips over the Atlantic
At the beginning of 2025, US market optimism was built on near-perfect market conditions; consequently, when weak economic data (including reduced consumer confidence) emerged, it triggered a rapid bond rally. In contrast, Europe entered the year with comparatively lower expectations, but experienced a considerable sentiment boost from positive election results in Germany and Ukraine ceasefire hopes, leading to stronger asset performance relative to the US.
Strong Q4 earnings comfort corporate creditors
Corporate credit investors were reassured by strong Q4 earnings, which highlighted the healthy balance sheets of US investment-grade companies. This financial strength, shown in stable debt servicing, helped markets navigate a volatile period. Therefore, income potential in corporate and securitized debt remains attractive, with low default rates expected.
Regional markets
In regional sovereign Eurobond markets yields on the bonds of Georgia and Turkey declined in Feb-25, while Kazakhstan experienced a slight increase of 7.1bps m/m.
In local Georgian market, GEL 25mn bond of JSC MFO Crystal matured in February 2025.
