Should investors fear bond market complacency amid spikes in credit volatility?

About 45% of the global bond market is now eligible for central bank purchases. While it is difficult to position for further significant falls in gilt yields, it is hard to fathom what will lead to yields breaking sustainably higher, according to SLI's Mark Munro.

The Bank of England is the latest to add corporate bonds to its shopping list and eligible bonds have rallied hard. While investor's should not fall into the trap of chasing yield everywhere that central banks are not buying, we believe long-dated US investment grade bonds and BB rated debt in the UK stand out on a relative value basis. Meanwhile, we recognise bank contingent convertible (CoCo) debt is a higher-risk part of a credit investor's toolkit, and therefore discipline and stock selection remain crucial. Goldman Sachs: Why the global bond route looks set to continue However...