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Greg Venizelos - Credit markets on a steady footing into Q4

Greg Venizelos - Credit markets on a steady footing into Q4

Market commentary
10 October 2017

Greg Venizelos, Senior Credit Strategist at AXA Investment Managers (AXA IM), reviews the credit market:

  • The reflation trade strikes back as September saw interest rates rise, the dollar move higher, high yield (HY) credit gains and investment grade (IG) returns in the red. This pattern could persist into year-end.
  • Renewed hopes around fiscal stimulus in the US and relative value considerations are near term tailwinds for USD credit which reversed its recent underperformance vs EUR credit in September.
  • Duration aversion, the hunt for yield, healthy growth/earnings, and a potential US tax reform plan, are all supportive for HY markets. USD HY market could hit double digit returns if spread tightening persists.
  • A higher share of credit purchases post European Central Bank quantitative easing tapering in 2018 could help address European government bond (EGB) scarcity issues, while simultaneously underpinning EUR credit technicals, killing two birds with one stone.

To read the full report please see here.

Media Contacts

Tuulike Tuulas  +44 20 7003 2233 -  Tuulike.Tuulas@axa-im.com    

Jayne Adair +44 20 7003 2232 -  Jayne.Adair@axa-im.com

Amy Butler  +44 20 7003 2231 - Amy.Butler@axa-im.com

Jess Allum +44 207 003 2206 – Jessica.Allum@axa-im.com

 

About AXA Investment Managers

AXA Investment Managers is an active, long-term, global, multi-asset investor focused on enabling more people to harness the power of investing to meet their financial goals. By combining investment insight and innovation with robust risk monitoring, we have become one of the largest asset managers in Europe with ambitions to become the chosen investment partner of investors around the world.  With approximately €735bn in assets under management as of end June 2017, AXA IM employs over 2,350 people around the world and operates out of 29 offices in 21 countries. AXA IM is part of the AXA Group, a global leader in financial protection and wealth management.

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