Halister News

(Bloomberg) -- Playing the credit market “opportunistically is probably the right thing to be doing” now as there is no imminent bubble on the horizon, according to Vanguard Asset Management.

• “We favor adding some pockets of risk in the rest of the summer as political risks are likely to stay neutral until September,” Nick Eisinger, a London-based strategist, says in phone interview. “In the short term, there is probably a good case for credit exposure.”
• Central banks are providing large support and a lot of this is getting priced very quickly into the markets
• QE isn’t necessarily creating a credit bubble, but it is encouraging people to move toward riskier assets
• There could be more opportunities when the BOE actually starts corporate bond purchases; sterling credit less liquid compared with euro, USD markets; recommends better-quality names in the U.K.
• Even as spreads are tightening in Europe, the presence of ECB is still important; sees opportunities there
• There is a range of new risks that will start to come in 4Q including negotiations for Brexit, constitutional referendum in Italy and the presidential vote in U.S.
• Recommends fading some risks heading into the year-end
  • Doesn’t see the risk of any imminent bubble in the market
• NOTE: Janus Sees Credit as ‘Good Place to Be’ Despite Bubble Risk