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Bond Market News
US Treasuries Rally amid Powell’s Dovish Comments
March 31, 2026
US Treasuries rallied across the board on Monday after Fed Chairman Jerome Powell indicated that the likelihood of keeping rates steady for a while. He said that it is too soon to know how much of an impact the oil-price shock will have, but noted that monetary policy is well positioned for it. Regarding oil induced inflation, Powell added that the “tendency is to look through any kind of supply shock”. Treasury yields eased by ~6bp across the curve while Brent Crude also eased yesterday to $106/bbl. Markets are currently pricing-in no interest rate action by the Fed in 2026.
Looking at US equity markets, the S&P and Nasdaq ended lower again, by 0.4% and 0.7% respectively. US IG CDS spreads widened by 0.2bp and HY CDS spreads were 3bp wider. European equity indices ended higher. The iTraxx Main CDS spreads were 0.1bp tighter and the Crossover CDS spreads tightened 0.4bp. Asian equity markets are trading lower this morning. Asia ex-Japan CDS spreads widened by 2.6bp.
New Bond Issues
- Bank Mandiri $ 5Y at T+180bp area
- KOMIR $ 5Y at T+135bp area
JBS raised $2bn via a two-part deal. It raised $1.25bn via a 11Y bond at a yield of 5.646%, 30bp inside initial guidance of T+160bp area. It also raised $750mn via a 31Y bond at a yield of 6.462%, 30bp inside initial guidance of T+185bp area. The senior unsecured notes are rated Baa3/BBB-/BBB-. Proceeds will be used to pay the consideration under its concurrent tender offers. Any remaining funds, would be used for general corporate purposes, including repayment of existing debt.
New Bonds Pipeline
- Sasol $ 7NC3 bond
Rating Changes
- Fitch Upgrades Rolls-Royce to ‘A-‘; Outlook Stable
- Moody’s Ratings changes SM Energy’s outlook to positive, affirms Ba3 CFR
- Moody’s Ratings changes the outlook of FirstEnergy to positive from stable; affirms ratings
- Land O’Lakes Inc. Outlook Revised To Positive From Stable; Ratings Affirmed
- Fitch Places Qatar’s ‘AA’ IDRs on Rating Watch Negative
- Fitch Places Sysco on Rating Watch Negative
- Sysco Corp. Outlook Revised To Negative From Stable On Restaurant Depot Acquisition; Ratings Affirmed
- Moody’s Ratings places Sysco’s ratings on review for downgrade following agreement to acquire Jetro Restaurant Depot
Term of the Day: Bridge Financing
Bridge financing is a temporary form of financing used to cover the borrower’s short-term costs until the moment when regular long-term financing is secured. This form of financing ‘bridges’ the gap between when the borrower’s funds are set to dry up and its next long-term funding option.
SoftBank said that it secured a $40bn bridge loan to boost investments in OpenAI and also for general corporate purposes
Talking Heads
On Bond Market Misjudging Slowdown Risk
Kelsey Berro, JPMorgan Asset Management
“Every day that this conflict persists brings us closer to the market being forced to consider the more negative implications for growth, which should ultimately push Treasury yields lower. Yields broadly have risen enough to be attractive.”
Daniel Ivascyn, Pimco
“What tends to begin as an inflation shock can quickly migrate into a growth shock… we are on the cusp of seeing a significant weakening in the economy.”
On Government Bonds Rallying Around the World
Gareth Berry, Macquarie Group
“The market is now letting its imagination run wild about what the world might look like in a month’s time if there is no resolution by then. Parallels with Covid are already being identified as economies are at risk of shutting down — this time due to lack of fuel”
Matthew Hornbach, Morgan Stanley
“If energy prices continue to climb, then downside risks to growth should rise further”
Ed Yardeni, Yardeni Research
“The front end of the yield curve is priced for a tightening policy response that we doubt is coming”
On downgrading global equities – US as ‘defensive’ market amid Mideast conflict – Morgan Stanley
“Uncertainty around magnitude and duration of oil supply disruption means outcomes for risk assets have become increasingly asymmetrical… We turn equal weight on Japanese stocks given negative tail risks as we expect it to come under pressure from supply chains and global recessionary impacts”
Top Gainers and Losers- 31-Mar-26*
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