DM Credit Indicator: Credit Chronicle 2020: Quarter 2

Read the quarterly investment review and outlook from Ninety One’s Developed Market Credit team. This covers the major global credit markets and includes a special focus article each quarter, to give a timely insight into a key topic for credit investors.

Jul 15, 2020

19 minutes

Read the quarterly investment review and outlook from Ninety One’s Developed Market Credit team. This covers the major global credit markets and includes a special focus article each quarter, to give a timely insight into a key topic for credit investors.
Investors witnessed a dramatic shift in credit markets in the second quarter, with an impressive rally continuing the rollercoaster start to the year. This was a very welcome development, albeit taking many in the market by surprise with its magnitude and speed.

The gradual reopening of global economies, tentative positive news flow around potential COVID-19 treatments, together with the unprecedented levels of fiscal and monetary support from global policymakers, all helped markets to edge higher week after week, with extraordinary policy measures also helping to restore market mechanics. Despite some minor wobbles towards the end of the quarter as secondary spikes in coronavirus cases occurred, markets remained largely resilient as the quarter drew to a close.

As the quarter progressed and market functionality resumed, significant opportunities arose for investors seeking to capitalise on both attractive outright spread levels, but also on compelling relative-value positioning across different regions and credit-market subsets. The scale of the moves in markets also meant that this relative-value equation between different markets has been continually evolving, providing great opportunities for flexible investors with a broad opportunity set.

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Authored by

DM Credit Team

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