by Summary:
Macroview US HY corporate bonds have benefited from the rise in the oil price, whereas European HY corporates are still looking for reassurance from the banking sector. Spreads on corporate bonds widened quite noticeably in February: those on US high-yield issues hit highs not seen since 2011 before narrowing again as China-related fears, worries over the oil price and concern about banks' profitability diminished. The energy and mining sectors were both boosted by the rise in the oil price to USD34 a barrel, and yields fell steeply. US high-yield corporates closed February with a gain of 0.5%, whereas the European high-yield segment lagged behind, with a 0.8% loss. Worries over the wellbeing of European banks have not completely been dispelled even though, at its forthcoming meeting, the ECB should exempt part of banks' reserves from being subject to a negative interest rate. The bank sector accounts for 22% of the euro high-yield segment, mainly in the form of subordinated debt instruments. So, any measures favourable for the banks should give European high-yield corporates a lift. The rally by US corporate bonds should continue in step with the rise in oil prices.
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Perspectives Pictet considers the following as important: Corporate bonds, high-yield, Macroview
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Macroview
Macroview US HY corporate bonds have benefited from the rise in the oil price, whereas European HY corporates are still looking for reassurance from the banking sector. Spreads on corporate bonds widened quite noticeably in February: those on US high-yield issues hit highs not seen since 2011 before narrowing again as China-related fears, worries over the oil price and concern about banks' profitability diminished. The energy and mining sectors were both boosted by the rise in the oil price to USD34 a barrel, and yields fell steeply. US high-yield corporates closed February with a gain of 0.5%, whereas the European high-yield segment lagged behind, with a 0.8% loss. Worries over the wellbeing of European banks have not completely been dispelled even though, at its forthcoming meeting, the ECB should exempt part of banks' reserves from being subject to a negative interest rate. The bank sector accounts for 22% of the euro high-yield segment, mainly in the form of subordinated debt instruments. So, any measures favourable for the banks should give European high-yield corporates a lift. The rally by US corporate bonds should continue in step with the rise in oil prices.
Topics:
Perspectives Pictet considers the following as important: Corporate bonds, high-yield, Macroview
This could be interesting, too:
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US HY corporate bonds have benefited from the rise in the oil price, whereas European HY corporates are still looking for reassurance from the banking sector.
Spreads on corporate bonds widened quite noticeably in February: those on US high-yield issues hit highs not seen since 2011 before narrowing again as China-related fears, worries over the oil price and concern about banks' profitability diminished.
- The energy and mining sectors were both boosted by the rise in the oil price to USD34 a barrel, and yields fell steeply.
- US high-yield corporates closed February with a gain of 0.5%, whereas the European high-yield segment lagged behind, with a 0.8% loss. Worries over the wellbeing of European banks have not completely been dispelled even though, at its forthcoming meeting, the ECB should exempt part of banks' reserves from being subject to a negative interest rate.
- The bank sector accounts for 22% of the euro high-yield segment, mainly in the form of subordinated debt instruments. So, any measures favourable for the banks should give European high-yield corporates a lift.
- The rally by US corporate bonds should continue in step with the rise in oil prices.
- However, more tangible evidence of production being scaled back will be needed if we are going to see oil prices even out at around USD45 a barrel, which would lastingly ease the pressures on at-risk debt issued by the energy and mining sectors.