Investors pivoting to safer credit; high-yield sees outflows

Central banks’ dovishness and low inflation have been a tailwind for fixed income securities, and credit in particular, BofAML argues on May 10. Investors remain willing buyers of ”quality yield” but risk sentiment is driving investors away from high yield funds. If US-China trade wars fail to de-escalate soon, the global “desynchronised growth” narrative will be threatened, BofAML says. This could kill the ”green shoots” emerging at present in the German and euro zone economies.