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Bond Market News
Markets Witness Sea of Red on Escalating Geopolitcal Tensions
March 23, 2026
Global markets witnessed a sea of red. US Treasury yields shot up across the curve by over 10bp, with markets now pricing in the possibility of Fed rate hikes this year amid inflation fears on the back of the war in the Middle East. This is a reversal in expectations after markets were pricing in at least one rate cut early last week. On Saturday, US President Donald Trump issued a 48-hour ultimatum for Iran to restore movement at the Strait of Hormuz, threatening to attack Iran’s power plants if it does not comply. Iran’s IRGC on the other hand, said that it will shut the strait indefinitely and attack regional energy facilities in countries that host American bases if the US strikes its power plants. Brent Crude continued to rally, trading at $113/bbl currently.
Looking at US equity markets, the S&P and Nasdaq ended lower by 1.5% and 2.0% respectively. US IG CDS spreads widened by 8.1bp and HY CDS spreads were 17.4bp wider. European equity indices ended sharply lower too. The iTraxx Main CDS spreads were 5.8bp wider and the Crossover CDS spreads were 39bp wider. Asian equity markets have opened deep in the red this morning. Asia ex-Japan CDS spreads widened by 9.8bp.
New Bond Issues
New Bonds Pipeline
- Kexim $ 3Y/5Y bond
- Korea National Oil Corp $ bond
Rating Changes
- Fitch Upgrades Broadcom to ‘A-‘/’F1’; Outlook Positive
- Tupy S.A. Ratings Lowered To ‘BB’ From ‘BB+’ On Weaker Profitability; Outlook Negative
- New Fortress Energy Inc. Issuer Credit Rating Lowered To ‘D’ From ‘SD’ Following Restructuring Agreement
- Moody’s Ratings changes New Fortress Energy’s outlook to stable, affirms ratings on restructuring plan
- Corning Inc. Outlook Revised To Stable From Negative On AI-Driven Optical Demand; ‘BBB+’ Rating Affirmed
Term of the Day: Breakeven Rate
The Breakeven Rate aka Treasury Breakeven Rate refers to the difference between the nominal Treasury bond’s yield and that of Treasury Inflation Protected Securities (TIPS). Higher breakeven rates imply that inflation is rising and lower breakevens imply a slowdown in inflation.
Talking Heads
On War Rippling Through the Global Economy
Chris Williamson, S&P Global Market Intelligence
“Front of mind is the impact of the war on inflation. Central banks will also need to consider downturn risks from the war, meaning clues will also be sought from the PMIs for the impact on demand and business confidence”
On State Street, Voya Seeking Shelter From Default Risk
Matthew Nest, State Street Investment Management
“Late cycle, securitized debt tends to seem attractive”
Tony Trzcinka, Impax Asset Management
“If we’ve learned anything from the past year, it’s that this administration will do everything in its power to provide a floor on markets”
Brian Quigley, Vanguard
“I think you need to be really careful with what correlation you’re assuming between MBS and corporate bonds at the moment”
On Wall Street Angst Mounts as Oil Shock, Fed Freeze Roil Markets
Mark Malek, Siebert Financial
“This past week has been a reckoning period… one that has now involved the worst case scenario: a direct assault on all energy infrastructure in the region”
Garrett Melson, Natixis Investment Managers
“Day by day, the market is just pricing in incrementally longer and longer ripple effects”
Christian Mueller-Glissmann, Goldman Sachs’ Global Investment Research
“If this rate-energy shock continues or even deepens, the risk is that growth pricing across assets needs to shift more bearish”
Top Gainers and Losers- 23-Mar-26*
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