I first picked up Frank Fabozzi’s Bond Markets, Analysis and Strategies back in the late 1990s during my Masters at Exeter — the definitive text for anyone serious about understanding fixed income. If Graham & Dodd’s Security Analysis was the bible for equity investors, then Fabozzi’s writing filled the same role for bond markets.
Markets are learning that patience, not timing, delivers value — and today’s yields still reward those who stay disciplined.
Markets thrive on narratives. Sometimes they’re grounded in data; sometimes they’re pure theatre. This summer, the script from Washington has veered closer to the latter.
By mid-July, bond markets look deceptively serene. Yields have eased modestly, credit spreads are contained, and volatility is nowhere near the extremes of recent years. On the surface, investors could be forgiven for believing the worst of the turbulence has passed. But beneath this calm lie cross-currents that deserve more attention — fiscal strains, political pressures, and supply dynamics that can shape the second half of the year.
Credit investing is a business of nuance — of measuring reward versus risk not just in spread terms, but in real return terms, liquidity terms, and behavioural terms. It’s about distinguishing today’s price from tomorrow’s value. And it requires not only an understanding of macroeconomic drivers, but also humility about what we can and can’t know in the short run.
In markets defined by data and precision, it is often structure—not sentiment—that reveals the most consistent opportunities. One such structural inefficiency arises not from mispriced fundamentals or surprising macro releases, but from something far more mundane: the calendar.
Bond investors live in a world shaped by probabilities, not certainties. Yet at times, markets seem all too willing to price in a singular outcome—as if the macro landscape were stable, inflation predictable, and politics benign. Today is not one of those times.
Markets are inherently forward-looking, and yet they often get ahead of themselves. While macroeconomic fundamentals provide the foundation for investment decisions, it is sentiment and positioning that frequently drive the most attractive opportunities.
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