Key Q2 Takeaways:
- The vote for Brexit surprised many investors, while the quarter's grand finale rally (that followed only a minor selloff) symbolized an irrational market.
- The massive amount of negative yielding sovereign debt globally has investors searching for yield wherever they can find it.
- U.S. Treasury rates should be higher based on economic data but are being held down by overseas investors escaping negative yields at home.
- Corporate bond spreads are still wider over a two-year period but gaining momentum more recently, driven mostly by flows.
- Credit fundamentals are mixed, but strong enough to not frighten investors away (particularly for investment grade companies).
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