With risk selling off around the world, many credit sectors are starting to look very enticing indeed. However, they may be more trap than value…
The most obvious value play at the moment is emerging market debt. Spreads have jumped sharply in early 2016, to more than 500 basis points. This has represented an attractive entry point for some time, but we remain worried about fundamentals. Emerging market currencies - and debt - have been hit hard by bargain-basement prices for the commodities most of them sell; a dollar strengthening from rising interest rates, and a general risk-off move in global markets. At least two tines of this three-pronged attack do not appear to be letting up soon. The global sell-off in early January i...
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