Short-Term Strength Continues

Weekly Comment | Fixed Income

Eurozone printed record high inflation, urging the ECB to hike policy rates while growth prospects likely to deteriorate amid significant macro uncertainties (war, commodity, COVID); we continue to favour high quality defensive factor and position at the lower end of the beta spectrum but recommend hybrid structures

US job market continues to run hot; rate hikes and QT are more or less priced in now and growth will decide the valuation of long duration assets going forward; we see decreasing asset correlation and alpha opportunity through credit selection

Credit spreads printed another week of moderate gains and demand for high quality papers remains high; implied vol back to pre-invasion level and implied correlation finally reached the inflection point, an important measure for systemic risk perception

Read the Article.

Reader Interactions

Get in touch

Type
SCHIPFE 2 CH-8001 ZÜRICH SWITZERLAND
ASSET MANAGEMENT: +41 43 888 45 60
WEALTH MANAGEMENT/ PRIVATE MARKETS: +41 43 888 60 60

Copyright Cape Capital © 2022. All rights reserved