Our Fixed Income Top Picks
Related content
US bank shares fell
The third-quarter earnings season in the US has picked up pace following the release of the latest figures from US banks. Based on preliminary expectations, the third quarter is likely to have closed with strong earnings growth for S&P 500 companies, led by the energy and technology sectors. The major US banks have still achieved solid growth on an annual basis, indicating that their operations remain strong, but the pace has clearly slowed in many cases, which has tended to result in negative share price reactions.
Commodities - Technical Analysis
Gold and silver continued their downward trend, bouncing off key levels. Until their downward trends are broken, they will not be able to produce a significant rise. The fall in oil prices reversed from the $87.5 level and began a slight upward movement. Natural gas remained in an uptrend; a significant rise could even occur if it breaks out upwards. The price of copper has become stuck in a wider range, so the oversold and overbought zones may offer more favourable trading opportunities. The falling prices of wheat and corn have reached key support levels; a buying reaction from these levels could present favourable long opportunities with limited risk.
Developments over the past two weeks have demonstrated that geopolitical and inflation risks have not disappeared. Nevertheless, yields in both the euro area and the United States are currently within what we consider to be reasonable ranges. Our latest selection features bonds that may offer attractive risk-adjusted return potential as part of a suitably diversified portfolio.
Until the first week of July, oil prices had normalised significantly, materially easing inflationary pressures and potentially increasing the appeal of longer-duration bonds. Yields in both the United States and the euro area are currently within what we consider to be reasonable ranges. However, recent developments in the Middle East suggest that the US–Iran ceasefire remains rather fragile, potentially leading to renewed volatility in both oil prices and bond yields. Nevertheless, corporate bond yields have returned to near-historical lows.
Euro-Denominated Corporate Bonds
The conflict involving Iran caused only a temporary spike in corporate bond yields. By the summer, yields had returned to near-historical lows as investor risk appetite recovered. Developments over the past two weeks have yet to result in any material change in this picture. Euro-denominated high-yield (HY) bonds continue to offer only a minimal yield premium over investment-grade securities. The additional credit risk should therefore be carefully assessed when selecting individual bonds.
Dollar-Denominated Corporate Bonds
Our selection of US dollar-denominated bonds includes several regional corporate issuers. Two OTP bonds are featured: subordinated instruments maturing in 2033 and 2035. The list also includes bonds issued by two Turkish companies, as well as a Telekom Srbija bond. Among US issuers, our current selection features one bond each from Amazon and United Airlines.
Get more out of your investments!
Global Markets Services
OTP Global Markets offers a broad range of services in the field of local and international money and capital markets.
Read morePrivate Banking Services
Personal care and expertise with OTP Private Banking, along with the knowledge, security, and innovations of a multinational banking group.
Read more