“The Spreads remain tight, although they have temporarily ruled out during the recent volatility linked to commercial announcements,” said Sam Vereecke, Fixed Income manager at DPAM.
- The fiscal policy now supplants central banks as a market engine (analysis of Yves Ceelen, CIO Global Balanced)
- The sustainability of the US public debt becomes a major source of instability (analysis of Sam Vereecke, CIO fixed Income)
Yves Ceelen comments: “We continue to enhance the independent portfolio components of the changing objectives of political decision -makers. Gold and, sometimes, silver have played this role since 2018 well, benefiting from both uncertainty linked to real rates and sporadic geopolitical thrusts. In the current context of budgetary domination and turbulence in the markets, it always seems relevant to keep an allowance measured with these real assets. ”
To read the full article Mid-Year Multi-Asset Outlook, click ici.
Sam Vereecke concludes: “In general, we remain positive on the short part of the American rate curve (that is, maturity less than 10 years). On the other hand, we are more cautious about long -term treasuries, where structural concerns concerning budgetary sustainability and inflation are more marked. Consequently, we generally express a bias of penitification on American bond markets. Conversely, bond prospects in Europe differ significantly. (…) On the credit side, we have observed a high volume of emissions since the beginning of the year, absorbed effectively by the market. The Spreads remain tight, although they have temporarily ruled out during the recent volatility linked to commercial announcements. They have since tightened and are close to their level of the start of the year. This allows a reasonable carrying compared to sovereign obligations, but an additional tightening seems unlikely. In the absence of a clear catalyst for a significant evolution in one direction or the other, we maintain a neutral position on the credit. ”
To read the full article Mid-Year Fixed Income Outlook, click ici.
