The heavy sell-off after US tariffs were announced and subsequent relief rally from the 90-day pause left global financial markets bruised in April, with big currency moves, notably a weaker USD, impacting investor returns. The Uncertainty Index surged on heightened risk aversion, while investors sheltered in gold and shorter conventionals. Credits held up well.
Key highlights:
- Macro and policy backdrop – IMF reduces growth projections
- Canadian governments – Further steepening in the Canadian curve
- Canadian credit – Credits were broadly stable, as tariff fears waxed and waned
- Global yields and spreads – Market focused on negative growth impact of tariffs
- Sovereign and climate bonds – Green bonds’ USD underweight a key theme
- Performance – US dollar weakness, and Euro and yen strength dominate returns
This report provides actionable insights on currency-adjusted performance, macro drivers, shifts in yields, spreads and curves across conventional, inflation-linked and corporate bonds within the Canadian fixed income market.
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