{"id":22826,"date":"2025-07-18T13:56:05","date_gmt":"2025-07-18T12:56:05","guid":{"rendered":"https:\/\/latribune.lazardfreresgestion.fr\/?p=22826"},"modified":"2025-07-18T13:56:05","modified_gmt":"2025-07-18T12:56:05","slug":"short-term-bonds-widen-the-gap-against-money-market","status":"publish","type":"post","link":"https:\/\/latribune.lazardfreresgestion.fr\/en\/short-term-bonds-widen-the-gap-against-money-market\/","title":{"rendered":"Short-Term Bonds Widen the Gap Against Money Market"},"content":{"rendered":"<h2>Chart of the Week<\/h2>\n<p>Since the beginning of the year, the ECB has cut its key interest rates four times, bringing its deposit rate down to 2%, compared with 3% at the end of 2024. Reflecting these adjustments, the \u20acSTR -which serves as the key money market benchmark &#8211; has returned to 1.9% and could continue to fall: the market is still anticipating a final rate cut by the ECB before the end of the year.<\/p>\n<p>Meanwhile, other moderate-risk options continue to deliver steady returns in the fixed income markets. As of July 18, short-term high yield bonds, represented by the ICE BofA 1-3 Year Euro High Yield Constrained Index, offer a yield-to-maturity of approximately 5% per annum. This yield advantage has allowed the index to consistently outperform money market instruments over the long run.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-22827\" src=\"https:\/\/latribune.lazardfreresgestion.fr\/wp-content\/uploads\/2025\/07\/Capture-decran-2025-07-18-145518.png\" alt=\"\" width=\"865\" height=\"362\" srcset=\"https:\/\/latribune.lazardfreresgestion.fr\/wp-content\/uploads\/2025\/07\/Capture-decran-2025-07-18-145518.png 865w, https:\/\/latribune.lazardfreresgestion.fr\/wp-content\/uploads\/2025\/07\/Capture-decran-2025-07-18-145518-300x126.png 300w, https:\/\/latribune.lazardfreresgestion.fr\/wp-content\/uploads\/2025\/07\/Capture-decran-2025-07-18-145518-768x321.png 768w\" sizes=\"auto, (max-width: 865px) 100vw, 865px\" \/><\/p>\n<h3><b>OUR <\/b><b>ANALYSIS<\/b><\/h3>\n<p>Short-term high yield bonds are naturally more volatile than money market instruments and the short-\u00adterm investment-grade segment. However, they exhibit lower volatility compared to the overall high yield market, offering a relatively conservative approach to fixed income investing. This is paired with yields-to-maturity that currently stand well above inflation.<\/p>\n<p>Moreover, it is worth noting that since 2007, declines in this market segment &#8211; typically linked to periods of market stress (e.g., 2008, 2011, 2020, and 2022) &#8211; have almost always been fully recovered within just one year.<\/p>\n<p>***<\/p>\n<p>Written on July 18 2025. Opinions subject to change.<\/p>\n<p>See also: <a href=\"https:\/\/latribune.lazardfreresgestion.fr\/en\/german-industrial-production-stabilizes-a-good-sign-for-europes-economy\/\">German Industrial Production Stabilizes: A Good Sign for Europe\u2019s Economy<\/a><\/p>\n<p>This document is not pre-contractual or contractual in nature. It is provided for information purposes. The analyses and descriptions contained in this document shall not be interpreted as being advice or recommendations on the part of Lazard Fr\u00e8res Gestion SAS. This document does not constitute an offer or invitation to purchase or sell, nor an encouragement to invest. This document is the intellectual property of Lazard Fr\u00e8res Gestion SAS. LAZARD FRERES GESTION \u2013 a simplified joint stock company with share capital of \u20ac14,487,500 \u2013 Paris Trade and Companies Registry No. 352 213 599. 25, RUE DE COURCELLES \u2013 75008 PARIS, FRANCE<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Chart of the Week Since the beginning of the year, the ECB has cut its key interest rates four times,&hellip; <\/p>\n","protected":false},"author":101016,"featured_media":22824,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[148],"tags":[2677,2516],"class_list":["post-22826","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-chart-of-the-week","tag-european","tag-fixed-income-market"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Short-Term Bonds Widen the Gap Against Money Market<\/title>\n<meta name=\"description\" content=\"Like Canada and the United Kingdom, the Eurozone benefited in the first quarter from an increase in U.S. imports driven by anticipation of higher tariffs. 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