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UST 10Y yield edged up 3bp to 4.15%, reflecting hawkish Fed signals amid resilient US data, while 2Y held at 3.48% with weekly drop of 4bp on rate cut hopes. Curve steepened slightly as short-end stabilized post-FOMC minutes, IG credit spreads tightened 1bp to 95bp, buoyed by strong corporate earnings. EM hard currency bonds outperformed, compressing 5bp on USD softening, though HY saw minor widening to 380bp on energy sector volatility.

MBS TBA 30Y dipped 2bp, convexity hedging subdued amid low prepay speeds at 5%. Agency spreads narrowed 1bp to +25bp over UST, supported by solid agency balance sheets. CLO AAA tranches traded flat at SOFR+110bp, with warehouse lines tightening on regulatory scrutiny.

Trump administration tariff rhetoric pressured Eurozone peripherals; Bund 10Y rose 4bp to 2.20%, French OATs spiked 7bp amid fiscal concerns. JGB 10Y yield ticked up 1bp to 1.05%, BOJ taper intact despite yen strength.

Outlook favors duration extension in UST 5-10Y bucket targeting 4.10% entry, hedging via 2Y/10Y steepeners at +15bp. Credit rotation to BB-rated IG names offers 150bp pick-up vs Treasuries, monitoring Libor-OIS for liquidity stress. EM value in Asia ex-China sovereigns, cap IG exposure at 25% amid election risks. Volatility regime persists; position for 25bp Fed cut in Q1 2026, pivot to swaps if curve flattens below -10bp 2s10s.