Uncertainty prevails: Attractive valuations exist but the risk of defaults is high

The first quarter was a rollercoaster for global credit markets with a severe, homogeneous sell-off, followed by a sharp, if more modest, central bank-induced recovery.

This has left many parts of the market attractively valued, even when considering the huge uncertainty around Covid-19 and its economic impact.  Valuation concerns as investors clamour for short-term certainty Unprecedented support and stimulus measures from various central banks and governments have helped credit markets to stabilise and then rebound. As the Covid-19 global death toll starts trending down and economies reopen, there is cause for cautious optimism. However, selectivity will be vital. Q1 company earnings season highlighted the real economic damage is only beginni...