Our Fixed Income Top Picks
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Commodities - Technical Analysis
Both gold and silver are in a short-term downtrend. It is still worth waiting for buying opportunities in these markets. Oil is becoming increasingly range-bound, which could set the stage for a significant move soon. Natural gas prices have been on an upward trajectory since breaking out of their downtrend. Copper has reached the projected level, from which a downward correction has begun. Wheat and corn are in a correction phase within their upward trends.
FX - Technical Analysis
The dollar’s trend reversed at the beginning of last week and started to strengthen. It has already reached the first target level; the natural level at 1.1597 should act as support, otherwise we may see further dollar strength. The Hungarian forint is undergoing some correction against both the euro and the dollar, but this is still not sufficient for a structural shift in the downside pattern, and reversals in the curve still need time to develop. In the case of the USD/JPY pair, there may be a chance for a reversal below the 159.38 resistance, but this would require a strong downward move within the next few days. In EUR/CHF, a higher low may form, which could indicate a turn to the upside.
U.S. and European corporate bond spreads remain at historically low levels, leaving limited room for yield premiums, particularly in the high-yield segment. Regional sovereign and corporate bonds denominated in euros and U.S. dollars still offer attractive alternatives with moderate risk profiles. In this report, we have selected instruments linked to fundamentally solid issuers that provide a balanced risk-return profile in the current market environment.
Diversification of the bond portfolio by currency should continue to be implemented through euro- and dollar-denominated regional government bonds (Hungarian, Romanian, Albanian), as well as high-quality corporate bonds issued in euros and dollars.
Euro-Denominated Corporate Bonds
Corporate bond yields remain at low levels, as risk appetite in the capital markets is currently high, supported by strong profit outlooks and a favorable macroeconomic environment. January started with an exceptionally strong wave of corporate bond issuance. In such an environment, it is challenging to find corporate bonds that still offer meaningful yields at acceptable risk levels. For this reason, we have kept well-known names on our list, as finding better alternatives is difficult.
Dollar-Denominated Corporate Bonds
Companies in the region typically issue bonds in euros, with a much narrower list available in dollars. The list includes two OTP-related bonds—subordinated instruments maturing in 2033 and 2035. Both have early call options, which can significantly limit the yield investors ultimately realize. Another Hungarian-linked bond on the list is MVM’s note maturing in June 2028.
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