Stabilization in bond yields. Inflation is showing signs of normalizing, we don't expect any more rate hikes in the remainder of the year. Traditionally, yields have peaked close to the peak of short-term rates.
In general, all fixed income is attractive at current prices, although we prefer short-term, investment-grade corporates.
Selective opportunities in the higher quality tranche of High Yield, although there is a risk of higher defaults among poorer quality issuers. Reducing liquidity in an environment of monetary tightening can increase defaults.
- Credit spreads at medium levels, on both European and US bonds.
- Stabilization of yields on government bonds, both European and American.
- We expect a repricing in high yield in both euros and dollars in the face of an increase in default rates. Preference for BB.