Halister News

(Bloomberg) -- Investors polled by Absolute Strategy are skeptical about a further narrowing of credit spreads and think higher stock valuations are unlikely, according to analysts including Dorothee Deck.

• The number expecting the U.S. yield curve to flatten has dropped to 47%, vs 59% in its last poll in June
• Uncertainty is elevated with more than 25% of respondents having “no strong opinion” about whether gold or oil will be higher a year from now, about whether U.S. real yields will increase, and whether the USD will advance
  • Two of the areas where respondents have highest conviction are on the outlook for 2Y and 10Y UST yields, with a 65% implied probability 2Y yields will rise and a 61% implied probability that 10Y will be higher; though these are down 7% and 4% respectively from the last poll
• The third top area of high conviction is that implied equity volatility will be higher, with a probability of 62%; again that is lower than in June when it was 65%
• Investors are bearish on the global business cycle for the first time since Absolute surveys began in December 2014
• A total of 201 respondents representing institutions with $3t AUM participated in the survey in the two weeks ending Sept. 16