Morgan Stanley issues alert on corporate bonds - papers

Morgan Stanley has issued an alert on corporate bonds after an explosive rally, reports the Telegraph.

Corporate bonds have seen the most explosive rally in nearly a hundred years since the markets touched the bottom last winter, but, according to a report by Morgan Stanley, they look increasing vulnerable as they pull far ahead of equities. Andrew Sheets, the bank's European credit strategist, has advised clients to beware signs of creeping angst in the credit options markets, where volatility has been flashing an early warning signal for some weeks. "The pace of the recent rally has, for the first time, begun to show signs of overextension," he said. THE RECOVERY HAS begun, althou...