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The road to normalisation for bond investors?
After another challenging year for bond investors, 2023 may continue to be volatile until clarity emerges on the pace of peak of interest rates, and inflation. Central banks are likely to keep their foot to the floor in lifting rates until inflation is tamed. The bond market may be too optimistic on the ultimate top in rates, creating mispricing opportunities. Investment grade corporate debt in Europe seems to offer much value at current levels, despite the risks of a recession.