Credit gains further ground in July

Credit markets clocked in yet a remarkable month in July, and the grind tighter continued. Fixed income proved to be, once again, the most defensive asset class of the lot. In the aftermath of the Brexit vote, and the failed coups d'état in Turkey midway through the month coupled with the Key central bank meetings by the European Central Bank and US Federal Reserve, the incessant global search for yield was still on top of the agenda for investors. During July, European and US High Yield posted noteworthy gains of 2.02 per cent and 2.34 per cent respectively in a month whereby credit had just come back from a turbulent month, most notably towards the end of June following fears that the infamous Brexit vote could derail markets. This derailment was short-lived and credit began the month strongly, with spreads and yields flirting at 15-month lows. Turkey was shocked by an attempted military coup on July 15 which failed coup is said to have been orchestrated by Gulenist factions within the Turkish military. This coup was swiftly countered due to lack of support from within the army's command chain but more importantly due to decisive public outcry. The situation in Turkey remains...

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