Welcome to Thoughts in the market. I'm Andrew Sheets, Chief Cross Asset

Strategist for Morgan Stanley. Hi, I'm Vishaytru Petur, Head of Fixed Income Research

at Morgan Stanley. And on the special edition of the podcast, we'll be discussing the 2021 outlook for global

credit markets and how investors can view corporate credit amid a synchronized global economic

recovery.

It's Thursday, December 17th at 1 p.m. in New York.

So Vichy, how are you thinking about the global fixed income markets from a broad view as we

head into next year?

Higher rate and steeper curves is the basic message we have for our outlook for 2021.

What do we mean by higher rates?

So we expect that the front end of the curve to be anchored to the Central Bank policy, no change there.

We expect the 10-year part of the curve and the 30-year part of the curve to go higher.

So the 10-year we expect will end up at 1.45% by end of 2021. Higher about 50 basis points from where we are today.

So Vichy, I think when investors kind of think about the interaction

between interest rates and other types of bonds in the market,

I really find there are kind of two schools of thought.

You know, there's a group of investors who think that

higher interest rates like the rise that we're forecasting is pretty bad for

corporate credit it's bad for emerging markets because those higher interest rates

suggest kind of less accommodative policy, higher

borrowing costs, etc.

And there's another school of thought that says no, actually, you know, if rates are rising

...