Global Credit Trader

This report details how AI-related capital expenditure and debt issuance are structurally altering USD IG credit spread curves, while highlighting shifting regional issuer dynamics between the US and European markets.

Key Takeaways

• 1.A bifurcation has emerged in USD IG credit spread curves where TMT curves have steepened due to AI-related financing, while other non-financial sectors have flattened.
• 2.Front-end non-financial IG spread curves are expected to move toward historical flats as US Treasury yield curves steepen toward year-end.
• 3.Regional credit lines are blurring as North American issuers play a greater role in the European credit market, with record issuance shares in EUR IG and HY.

Table of Contents

• Watch For Curves Ahead
• USD IG spread curves diverge between TMT and ‘everything else’
• USD IG 2s10s are also near the flat end of the longer-term range; recent steepening should subside
• EUR IG Curve: Flatness driven by technicals
• Regional exposures: Increasing influence from North American firms in Europe
• Forecast dashboard: Spreads, returns, issuance, defaults, and ratings migrations
• Forecast dashboard: Relative value views
• Earnings calendar
• Performance dashboard: Cash and synthetic markets
• Performance dashboard: Sectors
• Performance dashboard: USD Credit ETFs
• Performance dashboard: Bond-level dispersion
• Relative value dashboard: Excess spreads in the USD and EUR markets
• Performance dashboard: Biggest movers in the USD bond market
• Valuation dashboard: Percentile ranks for spreads and yields
• Valuation dashboard: Sizing the carry in USD and EUR fixed income markets
• Valuation dashboard: Macro index volatility
• Valuation dashboard: CLOs
• Microstructure dashboard: Top 20 most traded capital structures in the USD IG and HY markets
• Microstructure dashboard: Liquidity conditions in the USD secondary bond market
• Flow dashboard: Upcoming coupon and principal payments
• Flow dashboard: Positioning in macro indices
• Flow dashboard: ECB QT
• Foreign demand and hedging cost
• Primary market dashboard: USD gross issuance
• Primary market dashboard: EUR gross issuance
• Primary market dashboard: Use of proceeds
• Primary market dashboard: Net issuance
• Primary market dashboard: AI-related issuance for the USD and EUR markets
• M&A volume
• M&A volume (Strategic deals only)
• Primary market dashboard: CLO creation and refinancing
• Primary market dashboard: Maturity walls
• Fundamental dashboard: Credit metrics for US non-financial corporations
• Fundamental dashboard: Credit metrics for European non-financial corporations
• Default and ratings migration dashboard: Default trends
• Default and ratings migration dashboard: Upgrades and downgrades

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