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For bond investors looking to bet big on a rally this year, signs of distress in the world’s highly-leveraged housing markets are only adding to their conviction.

Places like the UK, New Zealand and Sweden — where house prices are slumping and mortgage payments are rocketingBloomberg Terminal — are high on their watchlist. The logic is that policy makers, loath to kill off a key engine for growth in many advanced economies, will pause or eventually reverse some of the aggressive tightening delivered over the past year.

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