Asia Junk Bond Spread Calm Belies North Korean Narrative

The move in spreads on dollar junk bonds in Asia was dwarfed last week by a surge in yield premiums for lower-rated U.S. companies, according to Bloomberg Barclays Indices. Investors in U.S. high yield may have decided to take profits on the North Korean news after recent compression in spreads, “more than a first order reaction to geopolitical risk,” according to Charles Macgregor, head of emerging markets at Lucror Analytics Pte. in Singapore. Corporate earnings are holding up and investors continue to hunt for yield, supporting spreads in Asia, according to Macgregor.

Bloomberg News
August 15, 2017, 03:42:58 GMT
Reporting by Finbarr Flynn; Editing by Neha D'silva