Chris Iggo (AXA IM) | Navigating through all the noise out there, it seems the most sensible expectation that investors should have is described by “lower rates but no recession”. Central banks were more dovish again this week and the Fed looks as though it is ready to meet markets expectations on cutting rates. There are risks to growth from a range of things, but we shouldn’t underestimate the power of the easier monetary policy message.
AXA IM | Despite some recovery in risk assets at the start of this week, the net reaction since the result of the UK referendum on membership of the European Union (EU) has been lower government bond yields and wider credit spreads in fixed income markets. This creates an interesting situation for investors looking at short duration funds.
LONDON | By Soren Willemann at Barclays | Credit spreads (here, iTraxx Main) have a strong relationship to the ZEW survey of eurozone expectations for economic growth (Figure 1) over long time horizons. In the past months, however, this relationship has shown a significant disconnect: the ZEW survey reveals a material worsening of sentiment, whereas credit spreads have been largely unchanged.