The ECB's latest QE round will drive risk asset valuations further

Collapsing oil prices, falling equities, over exposure to energy and global stagnation have been the narrative for high yield market bears, writes Kames Capital's Adrian Hull.

However, with the US dollar high yield market now in positive territory, oil at $36, and strong US employment conditions, it looks like the balance is tipping in the bull's direction. While all of these issues will continue to dog investor sentiment, the mid-February valuations of $ HY index of 8.87% were too extreme and there has been a dramatic rally since. The US energy index almost touched 20% in February, but with an average cash price of 54c to the dollar, the US energy component has become a decreasing part of the price based US HY index. Defaults remain low for the whole of th...