1. Credit Overshoot?
2. Time to take the other side of the “broadening” trade?
3. Geopolitics vs. Macro in EM fx
Heading 1
Heading 2
Heading 3
Heading 4
Heading 5
Heading 6
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur.
Block quote
Ordered list
- Item 1
- Item 2
- Item 3
Unordered list
- Item A
- Item B
- Item C
Bold text
Emphasis
Superscript
Subscript
1. Credit Overshoot?
Risky assets beware - relative to macro conditions, US HY spreads look too tight.
US High Yield spreads have pushed to almost 1 sigma through Qi macro fair value. Qi model confidence is high (91%) and been remarkable stable ever since last April’s Liberation Day.
Qi model value has also been stable of late. Macro-warranted fair value has been around the 315bp level for around 3 months now and does not “justify” the recent leg tighter.
Credit technicals may remain supportive but macro fundamentals suggest poor risk-reward down here. With tight credit spreads underpinning easy financial conditions, equity risks rise if HY blinks.
Continue reading our analysis on the other headlines by downloading the PDF below
Related Articles
Identify price dislocations, opportunities, regimes and sensitivities
1. S&P 500 - Same Data, New Regime
2. Rotation Risk: QQQ Looks Stretched vs IWM
3. Re-visiting FX carry
Identify price dislocations, opportunities, regimes and sensitivities
1. Equity bears need a Plan B?
2. Poor risk-reward in credit
3. Bonds vs Commodities: more to give
Identify price dislocations, opportunities, regimes and sensitivities
1. Cyclicals are at new highs. Macro isn’t there yet.
2. Europe HY Looks the Vulnerable Trade
3. QQEW: The One Still in Regime
Identify price dislocations, opportunities, regimes and sensitivities
1. KWEB looking interesting again, especially vs. FDN
2. USDJPY: Intervention Can Slow It. Not Stop It.
3. TU: Cheap Enough to Matter Again