LIVE MARKETS-Sterling credit looking cheap ahead of the UK budget
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STERLING CREDIT LOOKING CHEAP AHEAD OF THE UK BUDGET
Investors have been firmly buying the dip across most asset classes since the U.S. credit-driven sell off the other week, but there are still a few pockets that haven't bounced back.
BofA credit analysts reckon sterling-denominated credit is one.
Euro denominated investment grade credit spreads have squeezed back to 75 basis points, their lowest since early 2018, but, say BofA, "the one market that has been slow to join the retracement party has been sterling credit, with spreads for both (sterling corporates) and financials notably lagging their euro counterparts over the last few weeks."
They reckon uncertainty around the upcoming UK budget is part of the reason, but that the market is getting it wrong.
"That leaves a buying opportunity in sterling credit on the table, we think. As has often been seen in credit previously, lagging sectors retrace faster once markets get past political hurdles, and policy uncertainty declines."
(Alun John)
EARLIER ON LIVE/ MARKETS:
EUROPEAN SHARES SET FOR WEEKLY LOSS CLICK HERE
BEFORE THE BELL: FUTURES STEADY BUT ANOTHER MONTH OF GAINS CLICK HERE
NO TRICKS, SOME TREATS FOR MARKETS CLICK HERE
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