Squeeze

AXA
By April 12, 2019 13:56

Squeeze

This is an excerpt, click here to read the entire article.

Fixed income markets are enjoying a good run with the Federal Reserve again, suggesting this week that rates are on hold for the foreseeable future. Brexit has been delayed and the economic data continues to look more like “goldilocks” than the “big bad wolf”. Yet my conversations with investors still point to a cautiousness and lack of confidence in getting sustainable returns in most asset classes. For fixed income, the view is that yields are too low. Yet credit is providing very strong returns and, as I always argue, pure core government bonds are there to provide a hedge if risk turns sour. Stay bullish bonds for now.

The big squeeze

The squeeze in credit markets continues. April has seen spreads narrow by around 7 basis points in investment grade markets and 26-27bps in high yield. Peripheral sovereign spreads in Europe are also lower. Year-to-date the tightening of credit spreads

AXA
By April 12, 2019 13:56

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