MidLincoln Global Fixed Income Strategy

Rates & sovereigns

• Europe (core): With weekly yield rises led by Switzerland and Germany in the country aggregate table, stay underweight duration until momentum stabilizes.
• Japan: The DM sovereign “losers” list is dominated by long JGBs with large weekly yield increases, consistent with long-end volatility. Prefer shorter JPY duration and avoid concentrated 30–40yr exposure.
• US: Use the UST <10y indicator as the “anchor” rate. Stay tactically neutral and express views via the belly rather than the long end.

Credit

• Use the DM corporate movers and “Top DM Corporate by Yield” table as a watchlist (many extreme yields reflect distress/liquidity). Keep these as opportunistic, small positions only.
• Prefer quality spread in Financials/Agencies/Utilities versus lower-quality cyclical stories when volatility is rising.

Implementation (model)

• Overweight: DM IG Financials/Agencies; short/intermediate sovereigns where carry is attractive.
• Neutral: US intermediate Treasuries (express via roll-down).
• Underweight: DM long-end duration (especially JPY long end); “distressed” single-name high yield unless catalyst-led.

These tilts are anchored to the report’s DM yield indicators and the weekly DM sovereign/corporate mover tables.

Hard currency (USD) EM

• Use the country USD yield tables to identify carry with improving momentum (yields falling but still elevated) versus new risk premium (yields rising).
• Prefer: EM where yields have tightened or are stable and fundamentals are not deteriorating; pair trades can hedge beta.
• Avoid/chop size: Countries with rising yields and weak liquidity; keep concentration limits.

Local currency

• Use the local-currency yield tables as a screen, but treat returns as a joint bet on rates + FX.
• Default stance: FX-hedged local duration in more stable regimes; unhedged only if you have a clear FX thesis.

Implementation (model)

• Overweight: Higher-quality EM IG and “tighteners” identified in the weekly change table.
• Neutral: Broad EM credit beta; add on selloffs.
• Underweight: Names with widening yields and poor liquidity; long-end duration in high-vol regimes.

Playbook

• Frontier is about risk budgeting: small position sizes, clear exit rules, and liquidity-aware instruments.
• Focus on high carry + tightening momentum (large negative weekly yield changes) only when price action confirms.
• Use diversification across regions to avoid single-event blowups.

Implementation (model)

• Overweight (tactical): “tighteners” with still-elevated yields (screen via weekly change + current yield).
• Underweight: Frontier names with rising yields (risk premium building) unless catalyst-driven.

What the sector tables are telling you

• Wideners (yields up): Technology and Transportation show the largest yield rises in the last-month table — treat as risk-off / spread widening signals.
• Tighteners (yields down): Energy shows the biggest yield decline last month; Utilities and Industrials also tighten — carry is working here.

Implementation (model)

• Overweight: Energy / Utilities (carry + tightening momentum), select Financials.
• Neutral: Agencies / core sovereign exposure for liquidity.
• Underweight: Technology & Transportation credit until yields stabilize (or switch to higher-quality issuers within these sectors).