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November 2016 – Our portfolio in a volatile rate environment
Risk-free rates matter on the downside
Global rates markets are experiencing one of the largest selloffs in several years. This is all the more striking and painful for fixed income investors as they had only recently reached historical lows – more than a third of DM govies were trading at negative yields last quarter. Importantly, the end of such repricing may not be in sight, as commodity and energy prices have risen sharply and CB’s policies could become less accommodative. In short, there is a clear and present danger of additional rate market dislocation, which in turn will impact other parts of the fixed income market – including our European credit playing field...
Published on 14 December 2016