06 July 2016 at 10:30 GMT
- Surprise Brexit ballot weighs on Saxo bonds portfolio
- Vote hits Thomas Cook, consumer discretionaries
- 'A market-friendly exit deal remains highly likely'
- US rate hike hopes fade, boosting EM currencies
The surprise Brexit vote left many UK-centric traders underwater,
but we remain sanguine in the longer term. Photo: iStock
By Michael Boye
The surprise decision by the United Kingdom to vote in favour of leaving the European Union took financial markets by surprise
and thus also posed a challenge to the performance of our SaxoStrats
corporate bonds portfolios in June.
This is true for the most part on average, though – and this is just another reminder to spread your bets – there have been both sunny stories and more turbulent ones below the aggregate surface.
Predictably enough, Thomas Cook bonds were to be found among the latter post-Brexit as the economic and political uncertainty saw investors fleeing UK assets in general and consumer discretionaries such as travel agencies in particular.
The largest bank of the upcoming Olympic Games host nation, Banco do Brasil, has seen its bonds appreciate in value, despite the turmoil in Europe.
For more on the individual and portfolio performance of our #SaxoStrats Corporate Bonds trade views, please find the updated monthly presentation below.
Bond traders may consider an investment voyage from Britain to Brazil. Photo: iStock
— Edited by Michael McKenna
Michael Boye is a fixed income trader at Saxo Bank