High Yield Bonds flashing a warningWe have seen this movie before. High yield bonds work as a good proxy for risk-appetite in the market. Using a simple trend filter, we see clear warning signs developing. Question is - how far will this go?
About ICE BofA CCC & Lower US High Yield Index Effective Yield
Credit SpreadsWhen economy faces drag lending and borrowing of USD tightens. Investors expect higher yield for taking more risk causing the spread to widen, and liquidity to increase this also shows expectations of future default risk. High yield spreads- option adjusted have bottomed and are now starting to slow
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