BlackRock Sees Gains as Euro Corporate Bond Yields Surge 70bps to Over 3.8%
Investors who bought higher-yielding corporate bonds during the Iran war saw yields on the Euro Corporate investment-grade index jump 70 basis points to over 3.8%, driving the strongest monthly returns in over a year. BlackRock’s EMEA fixed-income chief says higher yields cushion income as credit spreads widen 16 basis points.
1. Bond Strategy Vindicated
Credit investors who bought higher-yielding corporate debt during the Iran war are seeing that high-stakes strategy pay off, as market fears ease and yields recede from crisis peaks.
2. Euro IG Yield Surge
Yields on the Euro Corporate investment-grade index climbed about 70 basis points from the end of February to surpass 3.8% at their peak, fueling the best monthly returns in more than a year.
3. Junk Bond Rally
High-yield euro bonds posted their strongest gains since 2023, while US junk and investment-grade indexes also swung from negative to positive territory as risk appetite recovered.
4. BlackRock’s Outlook
James Turner, head of global fixed income for EMEA at BlackRock, notes that elevated yields are providing income cushions even as credit spreads have widened only 16 basis points since hostilities began, with traders still pricing in two ECB rate hikes this year.