Bond Markets

UBS bond market update highlights steady credit markets despite geopolitical tensions and recommends focusing on high-quality corporate carry as spreads remain tight. Key rating outlook upgrades include NVIDIA, Micron, and Boeing, while Sappi and Lufthansa remain on the avoid list.

Key Takeaways

• 1.Credit markets have remained largely steady over the past two weeks, excluding EUR high yield, despite geopolitical uncertainty regarding the US-Iran conflict.
• 2.Corporate bonds offer appealing carry due to yields near historical highs, but tight spreads necessitate a focus on short-to-medium-term notes from high-quality issuers like NVIDIA and NextEra.
• 3.The report upgrades credit outlooks for Micron Technology, United Airlines, and Boeing to 'Improving' while affirming negative views on Sappi and Lufthansa.

Table of Contents

• Credit markets steady despite ongoing geopolitical uncertainty
• Value for selective investors
• Focus on quality carry
• Key recommendation changes
• Recommendations
• Key stories
• Issuers in our coverage universe
• Company comments
• UBS CIO risk views
• UBS CIO valuation views
• Required Disclosures

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