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By Mark DOWDING, CIO at BlueBay Asset Management
Uncertainty reigns but signs of lockdowns being lifted provide some guidance on the path ahead.
Further moves by the Federal Reserve to support credit markets, announced just before Easter, have helped to support the recovery in risk assets over the past week. At an index level, US cash corporate investment-grade spreads are currently around 235bp, having retraced approximately half of the sell-off between the start of the year and the wide print on 23 March. Plans to expand asset purchases to include ‘fallen angels’, which have been downgraded since the onset of the Covid-19 crisis, have also supported sentiment in high yield bonds, though the failure of oil prices to rally materially from...
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