Global corporate bond spreads narrowed over the month with the asset class outperforming government bonds. Risk appetite was bolstered by progress in US-China trade talks along with positive US economic data. As part of a “phase one” US-China trade deal, which is scheduled to be signed in January, the US agreed to drop some of the tariffs it imposed on Chinese goods earlier in 2019 and cancelled a further tariff rise that was scheduled for December. China, meanwhile, agreed to desist from competitive currency devaluations, offer improved access for US financial services, provide better protection for US intellectual property and annually import substantial amounts of US agricultural goods. US jobs and industrial output figures beat forecasts, with strong rises for November. In contrast, data showed German industrial output fell sharply in October.
*Source: Lipper to 31-Dec-2019, total return. Indices rebased to zero at at 29-Nov-2019.