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Citi

Positioning Amid Lower Interest Rates

Key Takeaways

  • Central banks have rolled out unprecedented levels of monetary easing and interest rates are expected to stay lower for longer.
  • The fall in cash interest rates presents challenges in asset allocation and Investment Grade (IG) corporate bonds are preferred with cyclical-oriented sectors a potential beneficiary in a new economic cycle.
  • USD-denominated Emerging Market Debt (EMD) offer compelling valuations. Citi analysts see opportunities in a barbell strategy between Asian (low beta) and Latin American (high beta) credits.
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