Rising HY defaults more than priced in
Default rate estimations depend on how you define defaults and what index you use, but there is no doubt we are at record lows in European high yield at the moment.
Insights Topic
Multi-Sector Bonds
Investors are overreacting to banks’ Russia exposure
European bank equity has been among the hardest hit sectors since Russia’s invasion of Ukraine, as fears of losses and a flight to quality have prompted investors to change positioning.
Steady Fed makes short end look attractive
Escalating geopolitical tensions have contributed to a volatile past week for investors, but uncertainty regarding central bank action continues to dominate the bond markets, with one investment bank now predicting nine straight hikes from the Fed beginning at its March meeting.
Taking the temperature of credit markets
So far this year, the spread between two-year and 10-year US Treasury yields has declined from 77bp to 51bp.
Managing the downturn
As 2021 wore on we became increasingly concerned that the disconnect between asset prices, economic fundamentals and monetary policy was becoming more acute.
What will turn this market around?
For fixed income investors, the start to 2022 has been trickier than any we have experienced for many years, but we think this difficulty is to be expected and aligns with our macro view.
Making sense of corporate bond softness
After a challenging January, which saw markets beginning to come to terms with a very hawkish Fed pivot and rising Russia-Ukraine tensions, it is worth taking stock of the moves we have seen in fixed income over the last few weeks.
Yields soften blow of Powell’s hard words
Powell’s hard line may have surprised investors, particularly in light of recent market volatility and increasing geopolitical risk in Eastern Europe, but the Fed’s fear of prolonged higher inflation looks to be trumping those concerns.
EM looks very cheap, but patience a virtue
Emerging markets assets have endured a lot of punishment during 2021.
Credit exposure should be smart and short in 2022
Fundamentally the outlook for 2022 appears less supportive than it was 12 months ago.
The Rodney Blog 2022: Policy, economy and markets must converge
What we are currently experiencing is a disconnect between monetary policy, the economy and the markets, a disconnect that in our view will struggle to survive much longer.
How swaps can reduce rates risk as we move towards tightening
With rising government bond yield curves one of the biggest concerns for fixed income fund managers going into 2022, Eoin Walsh points to interest rate swaps as one option for reducing the rates risk of a portfolio without impacting its credit exposure.