FICC (Fixed Income, Credit & Currency) Forum 2024
[i3] FICC Forum | Investment Innovation Institute

FICC (Fixed Income, Credit & Currency) Forum 2024

The multi-decade bull run of bonds came to a swift end in 2022, when the Reserve Bank of Australia (RBA) decided to increase the interest rate for the first time since 2010. In May 2020, the RBA kicked off a series of hikes that included 13 rate increases.

This unprecedented increase came to an abrupt halt as inflation eased and suggestions of rate cuts started to circulate.

A reduction in interest rates would be a boon for investors that have stocked up on bonds in 2023, as yields became attractive again. But the prospect of a new rate cutting cycle would also make it less attractive to invest in these defensive assets going forward.

Yet, rate cuts have not materialised this year as conflicting data has made the RBA careful of acting too soon.

Although inflation has moderated, it has remained stubbornly elevated above the central bank’s target range, while the economic outlook remains uncertain.

Inflation has put pressure on household spending, as the cost of living has risen significantly. But the employment market remains relatively tight, in particular compared to the RBA’s vision of sustained full employment and inflation at target.

In the United States, we see a similar picture.

US Fed­eral Reserve chair Jay Pow­ell said it was likely to take longer than expec­ted for infla­tion to fall to the Fed’s tar­get level.

In December, the Federal Open Market Committee indic­ated that it intended to lower interest rates by 0.75 per cent this year,but investors now expect just one or two reduc­tions, while at the start of the year, they anti­cip­ated there would be six.

  • What does this heightened uncertainty mean for institutional investors and their fixed income portfolios?
  • Which part of the curve is most attractive at this stage of the cycle?
  • What type of fixed income instruments thrive under these conditions?


What we perhaps can say is that the market conditions for fixed instruments look more gentle than they have been over the last 18 months. As such we have chosen the ladybug or lady beetle to represent this forum.

The lady beetle is not only a rather gentle insect, but it is also a useful one.

Farmers love this creature as it devours many agricultural pests, including aphids, small sap-sucking insects that if left unchecked can destroy crops. Lady beetles can eat up to 5,000 aphids during their lifetime and are so effective that they have been introduced by farmers in other countries, including North America.

In fact, the story goes that the lady beetle’s ability to control pests is where they got their name from. According to National Geographic, the name was coined by European farmers who prayed to the Virgin Mary when pests began eating their crops.

After ladybugs came and wiped out the invading insects, the farmers named them ‘Beetle of Our Lady’. This eventually was shortened to ‘lady beetle’ and ‘ladybug’.

Let this gentle insect be our mascot for this forum and symbolise the anticipation that 2024 might be a fruitful year for fixed income investing.

We hope to see you at the 8th Fixed Income, Credit & Currency (FICC) Forum.