M&G's Isaacs: The attraction of 'reverse Yankee bonds'

Remains positive on European credit

A comfortable victory for centrist candidate Emmanuel Macron in the French Presidential Election has been well-received by financial markets, with bund yields moving away from their mid-April lows as political tensions eased.

Meanwhile, European corporate bond spreads resumed their tightening path following some earlier pre-election weakness, with spreads now approaching the cyclical lows of early 2015. Macron triumphs to become youngest French President These moves can be justified when set amongst a backdrop of accelerating eurozone economic activity, a reduction of eurozone political risk and a European Central Bank (ECB) able to run loose monetary policy while inflation concerns remain benign.  A general trend of improving earnings, both for financials and industrials, conservative management behavi...