FICC Focus Bloomberg Intelligence

High yield had a great 4Q rally in rates and spreads, which filtered into 1Q gains as defaults stayed low. In Europe, the index default rate stands at 0.95% and the proportion of stressed and distressed bonds has come down, while it's higher in the US. Will 2Q sustain the gains, and why? Listen to Mahesh Bhimalingam, Bloomberg Intelligence's Chief European Credit Strategist, discuss the results of the 2Q24 High Yield Survey with Fiona Hagdrup, Head of Leveraged Finance Funds and PM at M&G Investments, along with market outlook and trends in a Q&A format.

They discuss our 2Q investor survey publication, covering investor positioning, sentiment, key return drivers, default and supply forecasts and relative-value opinions by geography, rating and sector in detail. They also discuss how leveraged loan prospects compare with junk.

Investigations into debtors’ pre-bankruptcy machinations are evolving toward a “consensus model” where committees of independent directors are cooperating with unsecured committees, according to Julia Winters, a partner in Katten’s commercial litigation practice. She shared her perspective on corporate governance amid financial turmoil, when Chapter 11 examiners make sense and the critical role indenture trustees play with Bloomberg Intelligence’s Negisa Balluku and Phil Brendel. Prior to that, Phil and Noel Hebert of BI discuss how the uncertain, higher-rate environment is whipping corporate credit spreads around. The podcast concludes with the BI Podcast team tackling the latest developments in bankruptcy courts and distressed situations, including J&J, WeWork, Ardagh Group, Yellow, Diamond Sports, Spirit Airlines, 99 Cents Only Stores and Express.

The challenges of unilateral FX intervention by the Bank of Japan may mean that a confirmed dovish Fed adjustment and/or a step-up in the BOJ tightening cycle remain the best path to address the cost-of-carry yen conundrum and take dollar-yen lower in the process, according to the latest FX Moment podcast. Host Audrey Childe-Freeman, Bloomberg Intelligence's chief G-10 FX strategist, talks to Chris Gaffney, World Markets president at EverBank, about whether it could be time to rejoin the dollar-bearish camp, with a focus on dollar-yen amid BOJ intervention considerations.
However, Fed rate cuts and/or aggressive BOJ rate hikes aren't on the agenda just yet: For now, the best case scenario for dollar-yen bears may be a 155-160 range.

Slowing growth and elevated interest rates are opening the door to fresh opportunities in the special situations world, as companies face growing “time under tension.” Rob Dafforn, chief investment officer of opportunistic credit at Polus Capital Management, joins Bloomberg Intelligence’s Noel Hebert and Sam Geier on this episode of Credit Crunch, part of the FICC Focus podcast. Dafforn dives into the three main investment targets — cyclical losers, secular losers and frauds — along with creditor-on-creditor violence, the management process for a long-short portfolio and much more.

In this edition of All Options Considered, BI's Chief Global Derivatives Strategist Tanvir Sandhu is joined by Jennifer Welch, Chief Geo-economics Analyst. They focus on geopolitics and market volatility, with topics including the conflicts in the Middle East, oil politics and the US election.

Chairman Jerome Powell had opportunities at the May FOMC meeting to put interest rate hikes back on the table and surprisingly did not, says Ira Jersey, host and Chief US Interest Rate Strategist for Bloomberg Intelligence. On this Macro Matters edition of the FICC Focus podcast, Jersey is joined by associate US Interest Rate Strategist Will Hoffman to discuss the key takeaways from both the Federal Reserve and US Treasury Department’s May 1 policy announcements. The pair unpack the implications of the announced taper to the pace of Fed balance-sheet runoff, as well as deficit and Treasury-issuance trends over the coming months.