At the core of every Pareto bond strategy is a bespoke credit assessment process: With long standing proprietary credit evaluation models, combined with dedicated local expertise and access to the issuers.
The approach provides a Nordic/Global corporate credit exposure with low geopolitical risk and a sound ESG profile.
Despite some good risk appetite showing in equity and credit markets, interest rate pricing seems to be telling a different story. The energy price shock induced by closing the Straight of Hormuz has clearly fed through into inflation data. With such an important economic channel still closed and the Persian gulf blocked, concerns about persistent inflation have pushed markets to price in further central bank tightening.
Norges Bank hiked rates in May and might do it again already in June. On a larger scale, markets are now convinced of rate hikes by both the Fed and the ECB to be their respective next move. As expected, Sweden’s Riksbank is the outlier and left the policy rate unchanged at their May meeting. The baseline scenario from their March report stands put, no change in their policy rate expected for this year.
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Die Nordics
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