Sygnia pares global bond underweight as Fed hike bolsters inflation-fighting credibility
TLT•Sygnia trimmed its global bond underweight to slight after a 25-basis-point Fed rate hike eased concerns about the central bank’s inflation-fighting credibility. It funded the shift from US cash while remaining mildly underweight bonds.
1. Bond allocation shift
Sygnia said it trimmed its global bond underweight to slight, citing the Fed’s 25-basis-point rate hike in September, its first hike since July 2023. It funded the move from US cash to diversify away from the dollar and lock in higher yields while remaining mildly underweight.
2. Market and South Africa
The brief linked rising yields to a global duration selloff involving stronger growth, oil above $100 a barrel, AI-linked issuance and quantitative tightening. Sygnia kept South African bonds neutral despite a 0.2% contraction in second-quarter output; the South African Reserve Bank raised its rate to 7.25% as the current-account deficit reached 2.6%.
