Financials HY Multi Sector IG Multi Sector:CEEMEA RV monitor -Focus on recent sell-off,Key observati

In this RV monitor, we focus on the fortnightly price action in EM/CEEMEAcorporate credit universe which halted the strong YTD rally in CEEMEAcorporates and caused yields to widen by 20bps in the last two weeks, partlyreversing the 45bps YTD contraction until late June. The UST10 YR yields roseby ~25bps bps to 2.38% during the same period. This was sparked by thehawkish statements from the key Central Banks (Fed, ECB and BOE)suggesting the beginning of an end of monetary accommodation. Also, theFed Chair’s comments on “somewhat rich valuations” across different assetclasses also turned the tides against risk assets in general. Finally, the ongoingdispute between GCC countries and Oil’s continued weakness made mattersworse for CEEMEA Credit universe. Although, spreads have taken this ratesdriven sell-off quite well, likewise in previous episodes of Taper tantrum, withaggregate CEEMEA and EM corporate spreads tighter by 3bps and 6bpsrespectively.