Hi André. How do you see bonds after observing the yield curve control from BoE, BoJ and ECB (indirectly via Anti-Fragmentation Tool)? Wouldn't you consider corporate bonds a better option?
Hola Andrés, apologies for my slow reply! If your question is whether I prefer corporate bonds over government bonds, the answer is a clear - it depends. A corporate bond is also exposed to the YCC of central banks you allure to, as the interest rate risk is expressed via the yield curve. A corporate bond adds credit risk on top of that. From a tactical viewpoint, I think it may be interesting to have some interest AND credit risk over the next few months (depending a bit on how Q3 earnings season presents itself), from a strategic view point I remain cautious on both risks for now. Hope this kind of answers your question?
Hi André. How do you see bonds after observing the yield curve control from BoE, BoJ and ECB (indirectly via Anti-Fragmentation Tool)? Wouldn't you consider corporate bonds a better option?
Thank you for your work!
Hola Andrés, apologies for my slow reply! If your question is whether I prefer corporate bonds over government bonds, the answer is a clear - it depends. A corporate bond is also exposed to the YCC of central banks you allure to, as the interest rate risk is expressed via the yield curve. A corporate bond adds credit risk on top of that. From a tactical viewpoint, I think it may be interesting to have some interest AND credit risk over the next few months (depending a bit on how Q3 earnings season presents itself), from a strategic view point I remain cautious on both risks for now. Hope this kind of answers your question?
Yes!! Thank you for your answer😊