--- title: "Schroders Investment: The probability of an economic \"soft landing\" is rising, bringing good opportunities for short-term UK bonds and long positions in European bonds" type: "News" locale: "zh-HK" url: "https://longbridge.com/zh-HK/news/271592720.md" description: "Julien Houdain from Schroders Investment stated that the possibility of an economic \"soft landing\" is increasing, and short-term UK bonds and long positions in Eurozone bonds have become investment opportunities. Although the United States remains the main influence on global financial markets, the primary force driving bond yields higher comes from outside the U.S. The market has overreacted to interest rate hike expectations, revealing investment opportunities in the bond markets of certain regions, particularly short-term UK government bonds, which are attractive due to the outlook of slowing inflation" datetime: "2026-01-06T02:44:04.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/271592720.md) - [en](https://longbridge.com/en/news/271592720.md) - [zh-HK](https://longbridge.com/zh-HK/news/271592720.md) --- > 支持的語言: [简体中文](https://longbridge.com/zh-CN/news/271592720.md) | [English](https://longbridge.com/en/news/271592720.md) # Schroders Investment: The probability of an economic "soft landing" is rising, bringing good opportunities for short-term UK bonds and long positions in European bonds According to the Zhitong Finance APP, Julien Houdain, the head of unconstrained fixed income at Schroders Investment, stated that the new round of interest rate hike expectations from major economies has pushed up bond yields, but this trend has been overreacted. As the possibility of an economic "soft landing" increases, this market misalignment is creating attractive entry opportunities. Although the United States remains the main influence in the global financial market, the driving force behind the rise in bond yields over the past month has come from outside the U.S. Asian, European, and dollar zone economies have shifted from previous expectations of interest rate cuts to digesting interest rate hike expectations for the next 12 months. In some regions, the market's reaction has been premature and excessive. Schroders has raised the probability of an economic "soft landing," which is clearly the most likely outcome. The chances of a "hard landing" have been lowered, reflecting that some labor market indicators, such as small business hiring intentions, have shown initial signs of stabilization. At the same time, considering the mild short-term inflation outlook (relative to the expectations already reflected in the bond market), the forecast of a moderate slowdown in economic growth in the fourth quarter of 2025, and the possibility that the new Federal Reserve chair may lean dovish, the scenario of an economic "no landing" is viewed as having the lowest probability of occurrence. The investment market is rapidly reflecting the interest rate hike expectations of developed market central banks, providing opportunities for selective increases in bond positions. The recent rise in bond yields is offering a good opportunity for economies that have maintained a cautious stance (such as the eurozone) to establish long positions, while also bringing more strategic bond market investment opportunities in Japan and Canada. As the UK approaches 2026, the outlook for slowing inflation makes short-term UK government bonds attractive. Based on signs of inflation easing, a loosening labor market condition, and the November UK budget indicating slight fiscal tightening in 2026, shorter-term UK government bonds (five years or less) remain a favored long position. On one hand, it is believed that with increased fiscal support for consumers under the "One Big Beautiful Bill," U.S. economic growth will remain strong until 2026. On the other hand, the local labor market still appears weak, which is one of the dual policy objectives of the Federal Reserve. Therefore, in terms of purely directional bets, better bond investment opportunities are emerging in other regions. Conversely, the expectation that the U.S. interest rate market curve will steepen continues. The underperformance of 10-year and 30-year bonds compared to 2-year and 5-year bonds reflects the weak fiscal condition of the U.S. economy (large budget deficit and rising debt-to-GDP ratio), as well as the potential risk that the Federal Reserve may overly loosen monetary policy due to a temporary weakness in the U.S. labor market, leading to economic overheating. In a calm month, a notable development in the U.S. investment market is the Federal Open Market Committee (FOMC) meeting in December. As expected, they announced an interest rate cut while also stating that they would expand the balance sheet size again through asset purchases, known as "reserve management purchases." This plan is not a disruptive measure, nor is it traditional "quantitative easing": the Federal Reserve primarily buys government bonds with maturities of up to three years, aimed at technical operations rather than being driven by monetary policy. Nevertheless, this move is favorable for the short-term U.S. government bonds and the overall liquidity outlook globally In terms of corporate credit, due to the extremely narrow spread valuation (the spread reflects the premium investors receive for bearing additional credit risk), a cautious view is maintained. However, considering the supportive macro environment, slight upgrades have been made to the ratings of various credit assets. If the spread widens, the outlook will be more optimistic, and it will be seen as a good opportunity to increase bond risk exposure. 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