Global corporate bonds generated positive returns over January, during a month when global government bond yields declined against the backdrop of the coronavirus crisis. Hopes surrounding easing trade tensions initially supported risk appetite, with the US and China signing a “phase-one” trade deal in mid-January. However, as the period progressed there were increasing worries about the new coronavirus that originated in China and its potential impact on global growth, with the Chinese authorities reporting thousands of cases and hundreds of deaths. US economic data was mixed though continued to be more robust than the eurozone, with the French and Italian economies shrinking over the fourth quarter. The UK left the EU at month-end after the two sides ratified the withdrawal agreement, as expected. New issuance came from the likes of Spanish telecoms giant Telefonica and Italian multiutility group Acea.
*Source: Lipper to 31-Jan-2020, total return, in euro terms. Indices rebased to zero at 31-Dec-2019.