UBS has downgraded US municipal bonds to Neutral from Attractive, citing near-term interest rate volatility and curve risks. The firm recommends a more defensive 1-10 year duration and maintains a constructive long-term outlook.
Key Takeaways
- 1.Downgrading preference for US municipal bonds from Attractive to Neutral.
- 2.Shifting to a more defensive duration posture of 1-10 years (effective duration 4.1 years).
- 3.Credit fundamentals remain stable with upgrades exceeding downgrades over the past 12 months.
Table of Contents
- CIO View: US municipal bonds
- Global Asset Class Preference
- Central scenario
- Upside scenario
- Downside scenario
- Global asset class preferences definitions
- Appendix
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Authors
Sudip Mukherjee
Securities
10-year Treasury
Themes
Municipal bond market strategy
Regions
North AmericaUnited States