US rotation means euro credit will outperform, Axa says

Tuesday, December 18, 2012

Axa Investment Managers is set to keep faith with European credit markets in 2013, despite "eye -watering" returns this year, but is concerned that improving sentiment may prompt a shift out of US corporate bonds and into equities, the asset manager said in a note. 

Comment by: Anonymous. Posted 11 years ago [2012-12-18 23:46:13]

Here's an obvious idea that just came to me while reading Axa's thoughts. In countries like France, Spain, and Italy, why not go long the (large) banks and short the sovereign? There's lots of spread in the trade and the logic can't be simpler, so there must be something wrong with the idea that I don't get. Too much collateral posting in the long CDS? Bad reg cap treatment?

CLOs

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