Where to for bonds post-Brexit?

Europe has also given markets plenty to fret over in recent months: while the European Central Bank has done a great job in steadying markets, uncertainty surrounds how the credit markets will react to potential road bumps when there is no ECB buying of corporate bonds. Global default rates remain l...

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Bibliographic Details
Published inFTAdviser.com
Main Author Watson, Kenny
Format Newspaper Article
LanguageEnglish
Published London The Financial Times Limited 03.10.2018
Subjects
Bond issues
Central banks
EU membership
Federal Reserve monetary policy
Geopolitics
Interest rates
International finance
Trump, Donald J
Volatility
Turkey
United Kingdom > UK
United States > US
China
Europe
Italy
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Summary:Europe has also given markets plenty to fret over in recent months: while the European Central Bank has done a great job in steadying markets, uncertainty surrounds how the credit markets will react to potential road bumps when there is no ECB buying of corporate bonds. Global default rates remain low and underlying economic growth is still positive and although the period of extraordinarily accommodative monetary policy is nearing its end, with the Federal Reserve hiking interest rates and the ECB the latest to join the tapering party, the unwinding will be slow and considered. Overall, the reduced levelof spread correlation (a function of central banks reducing asset purchases) should create relative value opportunities within sectors and, coupled with cross-market opportunities, this supports our view that credit will continue to deliver attractive income returns.
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