We forecast most long-dated government bond yields across developed markets to edge up in the coming months, as policymakers generally deliver less rate cuts than currently discounted in markets. In the US that's based on our view that a soft landing is still the most likely outcome for the economy. And despite a dimmer economic outlook for the euro-zone, we think sticky inflation will still prompt ECB policymakers to keep a higher floor under rates. The UK is, in our view, one of the few exceptions where bonds have scope to rally a bit further.

That view translates into corporate bond yields staying close to their current levels, as we see already compressed spreads narrowing only slightly.

And, although emerging markets are a mixed bag, we think local-currency sovereign bond yields there will generally fall by the end of next year as the EM easing cycle broadens on aggregate. Meanwhile, we expect the yields of dollar-denominated sovereign bonds to pick up a bit.

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