High-Yield Is Most Overpriced Since Crisis

High-yield collapse ahead?

Donald Trump’s inflationary rhetoric may have sent yields surging in the United States, but credit is still broadly expensive throughout the entire world especially in the risky high-yield space.

In Europe, high-yield is particularly expensive thanks to the European Central Bank’s big QE bazooka. According to research from SocGen, European high yield is as expensive as it has ever been. The average yields for single B rated credit on the iBoxx corporate indices stands at just 3.42%, at a time when many fixed income benchmarks such as German bund yields are widening. That said that Europe high-yield is expensive can be partly blamed on low investment grade yields. According to the bank, high-yield has...