|2023/03/22 / Erste Group Research|
Are credit spreads narrowing again soon?
The panic on the financial markets subsided thanks to UBS's swift rescue of Credit Suisse. Nevertheless, the turbulence has not left the non-financial corporate bond market unscathed. We believe that the massive spread increases are not fundamentally justified and that risk premiums should narrow again quickly once the financial market stabilizes on a sustained basis. The good fundamental situation of European issuers is also reflected in the speculative default rate, which fell further to 2.2% in February.
There are important dates coming up this week. At the FOMC meeting today, investors' eyes will be on the outlook, where the failure of some U.S. regional banks is likely to have left its mark. Also coming this week is the Eurozone Purchasing Managers Index for March. It remains to be seen how European companies assess the turmoil in the financial sector.
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|Author||Erste Group Research|
|Product name||Credit News|
|Topic in focus||Credits/ Corporate bonds|
|Economy in focus||Austria, Eurozone|
|Currency in focus||Euro|
|Sector in focus||-|
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