Allianz Investment said that the trend of easing inflation in the eurozone continues, with the European Central Bank lowering interest rates by 25 basis points to 3.25% in October, in line with market expectations. At the same time, their comments are dovish, with some market participants expecting a 50 basis point rate cut in December. Currently, this seems somewhat strained, but it cannot be ruled out that the European Central Bank will cut interest rates multiple times. The policy impact on short-term interest rates may provide support for the yield curve to steepen further. Allianz Investment tends to adopt a short-term strategy for US Treasury bonds, as they should trade within a broader range - as long as US economic data remains stable, while the inflation risk exacerbated by trade protectionism under the Trump administration remains a concern. The longer end of the euro yield curve is easily influenced by complex market dynamics (national fiscal policies and global economy). Allianz Investment favors investments in the steepening yield curve in portfolios, including in Germany and the United States. Furthermore, with recent yield increases, from a strategic allocation perspective, duration risk and fixed income yields are becoming increasingly attractive overall. Compared to German government bonds, the relative value of UK government bonds is particularly prominent. In terms of credit, companies continue to announce third quarter results. In investment-grade credit, utilities performed well in the third quarter, followed by financials, then industrials. Slowing asset value declines are driving continued recovery in real estate. Cyclical consumer goods are lagging behind, with the European market clearly weak, as several companies in the automotive and retail (especially luxury goods) sectors have issued profit warnings or downgraded guidance. Allianz Investment believes that investment-grade credit currently trades at fair value, as the market is re-pricing the strong fundamentals in most industries, while reducing concerns about future growth and improving the value of Eurozone debt. The advantages of a high interest rate environment, combined with relatively favorable valuations in industrials, continue to make financials attractive. Additionally, utility companies subject to US regulation and their defensive characteristics are also seen positively. In high yield, the performance of third quarter US dollar bonds exceeded euros, with CCC-rated and pressured credit bonds outperforming bonds of other ratings. The primary market remains active, with an ideal issuance schedule coming up. While maintaining overall risk exposure at levels relatively close to the benchmark, Allianz Investment expects the performance of industries such as telecoms, leisure, and banks to be better than energy (affected by falling oil prices), automotive, and media industries. Default rate expectations remain relatively mild, spreads are narrow, but absolute yield levels remain attractive. Year-to-date, Asian high yield dollar credit continues to outperform other credit markets by a significant margin, with the total return calculated at 16.05% according to the JACI Asian Credit (JACI) non-investment grade index. China's introduction of more stimulus measures has undoubtedly been helpful. Compared to several years ago, the Asian high yield bond market is more diversified, with China accounting for 25% of the JACI market value now, compared to around 50% in 2021, with the proportion of the Chinese real estate industry in the index being less than 10%, previously at 35%. Consumer, financial, and utility sectors currently account for half of the index. In other spread asset classes, Allianz Investment is optimistic about external sovereign debt of emerging markets as funds flow back into this asset class. The performance of some countries year-to-date is significantly better than others, including Ecuador, Egypt, Pakistan, Lebanon, and Ukraine, countries in which Allianz Investment holds a higher proportion. Several debt restructurings have been completed this year, including some projects stalled due to the new coronavirus. Allianz Investment believes that there will be no major credit events in 2025, as large maturity bonds are mainly concentrated on issuers supported by IMF programs.