ROBERT MCADIE, GLOBAL HEAD OF CREDIT STRATEGY, BARCLAYS CAPITAL, LONDON
We have a neutral allocation to global credit for 2007. Fundamentally, credit quality is currently supportive, with default rates set to stay low into 2007 and corporate balance sheets still cash-rich. Global liquidity remains robust and the combination of low real rates (albeit on the increase), Asian-driven growth and the commodity boom will continue to fuel liquidity in 2007.
However we are starting to see a turn in the