HSBC Prefers Investment-Grade Bonds and Emerging Market Local Currency Bonds

HSBC has released its Global Investment Outlook report for the third quarter of 2026. According to Jin10, the report indicates a preference for investment-grade bonds to secure coupon income, complemented by emerging market local currency bonds. Gold remains an effective tool for risk aversion and diversification, while infrastructure investments can provide stable cash flows. The institution suggests that, as the global central bank rate-cutting cycle nears its end, bond investments should focus on coupon income rather than capital gains, utilizing duration management and a preference for high-quality bonds to achieve potential returns. HSBC maintains a favorable view of the energy sector. In the context of high oil prices, the valuation, cash flow, and dividends of energy stocks are attractive, offering a hedge against oil price volatility.