TwentyFour

US banks remain bullish about the health of the consumer, but credit spreads are still pricing in not only a recession, but a fairly severe one. Are the banks wrong? Or have credit markets just backed up too far on negative fund flows?

With yields on B rated CLO bonds now as high as 18%, Elena Rinaldi looks at various scenarios for corporate default rates and questions why investors are overshooting even the most pessimistic scenarios.

With corporate bond spreads having risen to not far short of crisis levels, Johnathan Owen argues the 4%-plus yields on offer in short dated investment grade are an attractive entry point for investors that might not be around for long.

With Heimstaden showing its commitment to corporate hybrids with a €600m tender offer, Pierre Beniguel looks at the complex decision issuers have to make and says more could follow suit with bonds trading at steep discounts.

European ABS and CLOs had a turbulent Q2 as broader macro headwinds sparked heavy selling, but investors have made good use of direct trading to pick up bonds at prices not seen since Europe’s sovereign debt crisis.

Political chaos is once again taking the headlines in the UK, but bond investors should be cheering the UK regulator’s decision to raise banks’ capital buffers in preparation for an anticipated economic downturn, says Gary Kirk.

With investors seemingly unwilling to put money to work until they see clear evidence of the inflation trend reversing, Felipe Villarroel looks at two developments that tentatively suggest central banks’ delicate balancing act is actually working.

After H1 2022 broke market records for all the wrong reasons, Gary Kirk says fixed income outflows could reverse quickly if investors see evidence that central banks are turning the tide on inflation.

The US high yield market has experienced the third lightest month in terms of new issue flows since the Global Financial Crisis. Chris Holman explains what this means for default rates going into the second half of the year.

Aza Teeuwen explains how market moves have impacted BB CLOs and looks at historic trends analysing their behaviour during crisis scenarios.

At this stage in the economic cycle investors may need to think about ways to protect their portfolios while providing strong relative value. Johnathan Owen explains why short dated investment grade can offer exactly that in his latest blog.

With Fed rate hikes continuing and the economy progressing into late cycle stages, Mark Holman presents his expectations from the Fed going into the second half of the year and explains why he believes Treasuries can provide the protection investors may need.