Base effects, lower (or less high) energy and raw materials prices and a broad economic slowdown later in the year may see eurozone inflation stabilise or retreat towards the end of 2023. However, for now, an inflation-busting ECB will likely keep its foot on the monetary policy brake and could soon even raise policy rates by a chunky 75bp rather than the more widely expected 50bp.
Listen to this Talking heads podcast in which Arnaud-Guilhem Lamy, head of euro-aggregate bond strategies, and chief market strategist Daniel Morris discuss the recent market volatility and the attractions of investing in corporate bonds. Arnaud-Guilhem highlights the appeal of agency and covered bonds, while emphasising his positive view on euro investment-grade credit where implied default rates are now too bearish and spreads look alluring.
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