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  Senior Loan & High Yield Review - 2nd Quarter 2017
Posted Under: Senior Loan

Macro Overview
Equities posted a strong second quarter of 2017, with the S&P 500 Index up 3.09%. Equity market volatility remained subdued, despite weaker oil prices, while interest rates declined for much of the quarter. Crude oil fell from an intra-quarter high of $53.40 to $42.53 near the end of the quarter while the 10-year U.S. Treasury yield touched 2.414% in May and drifted to 2.126% by mid-June, eventually finishing the quarter at 2.304%. Declining yields were a boon to fixed-income, with investment grade corporate bonds up 2.42% and high-yield bonds up 2.14% for the quarter. Moreover, the yield-curve flattened significantly in the quarter, with the difference between 2-year U.S. Treasuries and 10-year U.S. Treasuries falling to a mere 79 basis points (bps) in mid-June from 113 bps on March 31, 2017. In our opinion, the primary catalyst for lower rates and a flattening yield curve was a building narrative around weaker inflation data in the U.S. and a view that the Trump Administration's pro-growth policies may be far more difficult to implement than previously anticipated.

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Posted on Tuesday, July 18, 2017 @ 3:00 PM • Post Link Share: 
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These posts were prepared by First Trust Advisors L. P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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