For anyone who managed to avoid Goldman's "can't miss" recommendation and get short the EURUSD [4]two weeks ago ahead of the ECB's stunning disappointment which sent the pair soaring and crushing virtually every macro hedge fund [5] and FX trader, Goldman's Asset Management group [6]has another recommendation just for you.
[7]
In case the fine print is a little too small, here it is in normal font:
High Yield & Bank Loans: We have increased our overweight in high yield.
Why?
- High yield returned -1.53% over the week, with spreads widening by 23bps, driven by underperformance in energy-related markets. Bank loans returned -0.27% and European high yield returned -0.58%.
- High yield funds experienced $398mn in inflows over the week, while loan funds saw $387mn in outflows.
- High yield primary market activity increased over the week, with eight deals pricing for $4.1bn. Bank loan new issue volumes fell, with nine deals pricing for $2.3bn.
[8]
Here is one simple explanation of what Goldman suggests you do:
[9]
Here is another: buy everything that Goldman has to sell. Confused: see Abacus [10].
h/t @insidegame