What does the WBI monitor in the fixed income market?

The WBI, or the World Bond Index, focuses on monitoring broad trends in fixed income securities, which includes tracking inflation-linked bonds. These bonds are designed to protect investors from inflation risk by adjusting the principal value based on changes in an inflation index, typically linked to the Consumer Price Index (CPI). By monitoring inflation-linked bonds, the WBI provides insights into how inflation expectations affect fixed income markets, making it relevant for investors seeking to hedge against inflation.

The other options do not directly align with the primary focus of the WBI in the fixed income market. For example, communications costs and global CDS pricing relate more to credit market risk and corporate finance rather than the realm of fixed income securities. US Treasuries, while crucial to the fixed income market, represent just one segment of the broader bond universe that the WBI encompasses. Thus, the WBI’s focus on inflation-linked bonds showcases its role in assessing the impact of inflation on a wider array of fixed income instruments.