Euro Credit 2019 Outlook

Also Interesting

• Looking for cover
• Leveraged loan investment and ESG in light of Covid-19
• Policy Brief 17-27: Will Rising Interest Rates Lead to Fiscal Crises?

All about policies?

Last year was a difficult one for euro credit, with both the ICE Bank of America Merrill Lynch (ICE BofAML) investment grade (IG) and high yield (HY) indices posting negative total returns of -1.1 and -3.6%, respectively (in euros) (see Chart 1). This was entirely due to wider credit spreads, as medium-term German government bonds yields fell slightly. Looking back, policy makers had a major impact on the performance of credit markets—whether the tapering of the European Central Bank’s (ECB) quantitative easing (QE), Italy’s push for fiscal stimulus, or trade tensions, especially between the US and China, which have hurt risk sentiment around the globe and begun to eat into economic growth.