The International Capital Market Association (ICMA) released its Q4 report for 2025, which highlights features on: the US Treasury (UST) market: major drivers and current outlook; market fragmentation and the pursuit of greater international harmonization; the future of financial markets: the role of DLT and tokenization in Europe; demystifying repo haircuts; and building integrated bond markets: lessons from the EU consultation and ICMA’s vision.
It also includes international capital market practice and regulatory policy updates on primary markets, secondary markets, repo and collateral markets, sustainable finance, fintech and digitalization, and emerging capital markets.
In a feature article on the UST market, Mohit Kumar, managing director, global macro strategist and chief economist for Jefferies in Europe explained: “Investors are concerned that US Treasuries could lose their safe haven and reserve status. However, these fears are likely exaggerated as there are no credible alternatives to such a deep and liquid market for large institutional accounts.
“We see the possibility of investors demanding a higher premium for USTs, but do not see a large shift in structural demand. Overall, we see US Treasuries continuing to provide a deep liquid market for investors. Front end yields should experience downward pressure given the Fed cutting cycle, while the long end faces pressure from fiscal concerns. In short, we see a range bound environment with 10Y US Treasury yields in a 4-4.50% range over the next 6-month horizon, and steepening pressure on the curve,” he wrote.
In an article discussing repo haircuts, Andy Hill, managing director and co-head of Market Practice and Regulatory Policy at ICMA and Alexander Westphal, senior director and secretary to the European Repo and collateral Council at ICMA, wrote about “demystifying” repo haircuts, explaining why they are not an effective policy tool to manage leverage risks.