Where now for global credit markets?

The forthcoming political calendar contains several events that have the potential to unnerve markets: the UK is set to invoke Article 50 of the EU treaty; populist movements seek to redraw historic party lines at elections in France and Germany; Italy's caretaker government needs to shore up its banks; and Donald Trump formally assumes power in the US.

Many market participants instinctively retreat during episodes of volatility, yet active investors can look to take advantage of improved investment opportunities as price dislocations appear.  How are politics impacting corporate credit markets? When sentiment dominates investor activity, different assets can quickly rally or sell off disproportionately, resulting in divergent moves in related securities.  For example, the sterling credit market was twice as volatile as its dollar and euro counterparts in 2016 (on an excess return basis), largely attributable to concerns leading u...