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Please be advised that future verbal and written communications from the bank may be in English only. These communications may include, but are not limited to, account agreements, statements and disclosures, changes in terms or fees; or any servicing of your account.

Por favor, tenga en cuenta que es posible que las comunicaciones futuras del banco, ya sean verbales o escritas, sean únicamente en inglés. Estas comunicaciones podrían incluir, entre otras, contratos de cuentas, estados de cuenta y divulgaciones, así como cambios en términos o cargos o cualquier tipo de servicio para su cuenta.

Informamos que as futuras comunicações do banco, verbais e escritas, podem estar disponíveis apenas em inglês. Essas comunicações podem incluir, entre outras, acordos de conta, extratos de conta e divulgações, alterações aos termos ou tarifas, ou qualquer tipo de serviço pertinente à sua conta.

仅此通知,本行即日起发出的口头及书面通信可能将只提供英文版本。这些通信可能包括但不限于账户协议,账单和通知,条款或费用变更;或任何为您账户提供的服务。

Please be advised that future verbal and written communications from the bank may be in English only. These communications may include, but are not limited to, account agreements, statements and disclosures, changes in terms or fees; or any servicing of your account.

Por favor, tenga en cuenta que es posible que las comunicaciones futuras del banco, ya sean verbales o escritas, sean únicamente en inglés. Estas comunicaciones podrían incluir, entre otras, contratos de cuentas, estados de cuenta y divulgaciones, así como cambios en términos o cargos o cualquier tipo de servicio para su cuenta.

Informamos que as futuras comunicações do banco, verbais e escritas, podem estar disponíveis apenas em inglês. Essas comunicações podem incluir, entre outras, acordos de conta, extratos de conta e divulgações, alterações aos termos ou tarifas, ou qualquer tipo de serviço pertinente à sua conta.

仅此通知,本行即日起发出的口头及书面通信可能将只提供英文版本。这些通信可能包括但不限于账户协议,账单和通知,条款或费用变更;或任何为您账户提供的服务。

Global-High-Yield-2020-Squeezing-water-from-a-stone

Perspectives

Global High Yield 2020: Squeezing water from a stone

Kris Xippolitos

By Kris Xippolitos

Head - Fixed Income Strategy

December 12, 2019Posted InFixed Income and Investment Strategy

Supported by low refinancing risks, low default rates and a low yield environment, global high yield (HY) bonds have enjoyed outsized returns in 2019. Looking forward we remain constructive on HY markets, as downside risks have been reduced. This is consistent with our relatively optimistic outlook for the New Year.

However, expectations for HY bond performance in 2020 should be moderated. We expect US HY bonds to generate returns between 4-5%, with CCC-rated debt underperforming. We expect similar performance in US bank loans where “all-in yields” above 6% are attractive, with lower price volatility. This can create attractive risk-adjusted returns, relative to other markets.

In Europe, we expect euro-denominated HY bonds to return between 2-3% in 2020, as European Central Bank bond purchases support spreads. However, lower absolute bond yields offer less support if core rates rise, as we expect. We expect slightly better returns in Euro bank loans, where carry opportunities are higher.

UK and Asia HY markets also offer attractive opportunities, where spreads and yields are higher and have the scope for tightening. Average sterling-denominated HY bonds yield 5.5%, while Asia HY yields are near 8.5%. Of course, both markets come with heightened risks around Brexit and rising US/China trade tensions.

 

Read Global High Yield 2020: Squeezing water from a stone