UBS strategists highlight that tariff‑related uncertainty still looms large—yet credit spreads sit near year‑low levels, suggesting markets are underestimating risk. Here’s a mobile‑friendly, insight‑driven playbook with two must‑use API tools.
Credit spreads have tightened to near‑yearly lows despite looming levies.
Defensive cash deployment: EU fund cash balances surged in June, then rotated into primary credit deals—even those with unattractive pricing.
Dip‑buyers standing by: Investors still ahead of benchmarks hold cash, ready to pounce on volatility.
Stay on top of tariff announcements and policy shifts using the Economics Calendar API, which delivers every trade‑policy and macro release date.
UBS recommends replacing costly CDS hedges with rate‑market strategies:
Receive July or September ECB contracts for a more efficient hedge.
IG vs. iTraxx Main: Long EU investment‑grade cash vs. short CDS to exploit summer seasonality when IG tends to outperform HY.
To pinpoint less crowded opportunities, pull real‑time issuer credit scores and outlooks via the Bulk Ratings API.
High‑Yield Preference: Offers superior asymmetry versus crowded IG trades.
Auto & Energy Credits: Tariff exposures in autos and low correlations of energy credits to oil prices create idiosyncratic trades.
Neutral Energy Stance: Low credit‑spread correlations to oil support a neutral view despite price swings.
Conclusion
With tariffs still the dominant tail risk, efficient rate hedges and selective credit positioning are key. Automate your trade‑policy calendar with the Economics Calendar API and monitor issuer health via the Bulk Ratings API to stay ahead of the next tariff‑driven shock.
