As with other global investment markets, fixed income indices also rebounded. Anticipating that inflation might peak, market sentiment improved as expectations on monetary tightening have eased somewhat. Over the month of July, Bloomberg Global Aggregate, US Investment Grades, US High Yields, and Emerging Markets US Dollar Bonds gained 2.13%, 3.24%, 5.90%, and 2.11% respectively. Although markets have partially recovered, inflationary pressures remained at multi-decade highs. We expect rate hikes and quantitative tightening to continue before inflation returns to the long term target. That said, according to interest rate futures data, there is more confidence that global central banks can bring inflation down, rates are expected to peak as early as Q1 in 2023, and could even see some rate cuts afterwards. The slowdown in hikes will reduce the downside for the asset class, and could even offer potential upside as yields change in direction. Interest rates aside, global economic growth have visibly slowed down, with the possibility of recession in the next 12 months higher. We maintain our call to minimise credit risk, while moving neutral on duration. High yield bonds will face more headwinds given the weak economy, spreads widening could further pressure asset prices. Investment grade bonds on the other hand are traditional beneficiaries in economic downturns as investors seek to reduce their equity exposure, alongside the potential price appreciation off rate cuts. With lower further downside and potential risk hedging benefits, we are now positive on IG bonds in the US and Asia.