Fixed income

U.S. leveraged loans are delivering some of the best returns in the fixed-income market this year, indicating that investors think any impending downturn could be slow to come and not particularly severe.

Schwab Asset Management is seeking to draw investors to its high-yield bond exchange-traded fund with one of the lowest fees in the industry, even as rising rates and default fears rattle the asset class.

In their latest assessment of the bond market outlook, Morgan Stanley strategists are challenging the former head of the Federal Reserve Bank of New York's view that losses are likely to deepen.

The market for wagers on the outlook for central bank policy shows traders now expect the benchmark rate to peak in September, instead of July.

They are bullish on equities in Japan, Taiwan and South Korea and recommend an overweight position in developed-market government bonds, including long-dated Treasuries

The Treasury's cash balance fell to just $37.4 billion on Tuesday, according to data published Wednesday. That more that reverses the previous day's bounceback.

Traders amped up wagers on a June rate increase to about 40% after Fed Bank of Dallas President Lorie Logan said the case for a pause next month is not clear.

Fixed-income trading revenue declined 17%, the firm said in a statement Tuesday, leaving Goldman the only major Wall Street bank so far to have posted a drop for that business.

The U.S. 30-year yield rose to the highest level since November, joining the rest of the Treasury market in offering a return of at least 4% after labor-market data.

The bond market faces a bigger threat than recent rate hikes: the notion that rates will stay elevated even after the U.S. central bank's inflation fight is all over.