NEW YORK: It’s premature to buy Asian credit now despite their drop given the potential for a wide range of outcomes from Russia’s invasion of Ukraine, according to analysts at Goldman Sachs Group Inc.

       “We expect global macro concerns would keep risk premia elevated,” Goldman credit analysts including Kenneth Ho wrote in a report.

       “We do not believe that now is the right time to buy the dip” for both Asia investment-grade dollar bonds and high-yield debt from the region excluding China property notes. The US bank last week said it expects yield premiums on both asset classes to be wider at the end of this year than it had previously forecast, given worsening risk asset sentiment caused by the war in Ukraine.

       Asian investment-grade dollar bonds have lost almost 6% so far this year and the bonds declined every day last week, a Bloomberg index shows.

       Investors should search for shorter-dated debt in both investment-grade and junk notes in the region, the analysts wrote.

       The Federal Reserve is poised to lift interest rates for the first time since 2018 this week, as elevated energy prices stoke the highest US inflation in four decades.

       Goldman economists recently lowered economic growth forecasts and raised estimates for inflation across major economies, because of the impact from higher oil prices and other fallout from the war in Ukraine.

       The economists last week warned the probability of a US recession in the next year may be as much as 35%. — Bloomberg