Quick Take – Turning constructive on US high-yield credit

We think US high-yield spreads will trade at or below 400 bps throughout this year. Upward revisions to our US 2024 US GDP growth forecast and improving corporate fundamentals mean that a sub-2% default rate for US HY credit by 2024 year end can be achieved.

What you will learn:

• This suggests high-yield credit is likely to outperform both DM bonds and equities over our tactical horizon, and we will promote the asset class to overweight (from underweight) within our Global Asset Allocation, released next week.