JPMorgan Asset Management’s fixed-income team highlights that with oil trading above $110, economic growth could slow sharply, forcing bond investors to shift from betting on higher yields to anticipating a rebound in Treasuries. Elevated energy costs, rising borrowing expenses and market volatility are seen as drivers that may ultimately push yields down as recession risks mount.

JPMorgan’s equity structuring desk is recommending over-the-counter “knock-out” put structures and Euro Stoxx 50 put spreads designed to profit in a gradual market decline while limiting hedging costs. These strategies target a slow, sustained pullback rather than extreme swings, reflecting strategist views that volatility spikes are likely to be contained.

JPMorgan strategists join contrarian investors in adding local-currency and dollar-denominated emerging-market debt after this sector’s worst monthly performance since 2022. With central banks poised to cut rates to counter a growth shock, beaten-down yields in regions like Eastern Europe and Latin America are being viewed as attractive entry points.