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Chart Of The Week - Credit Spread Complacency
This week: market update, rebounding REITs, PMIs and pricing pressures, bond yield outlook, credit spreads and complacency risk...
This email gives you a brief overview of what was covered in the latest Weekly Insights report including of course, the Chart Of The Week.
Chart of the Week - Credit Spread Complacency
Credit Spreads vs Bank Lending Standards: The just released quarterly bank loan officer survey showed banks continuing to tighten lending standards across the board and likewise expecting lower demand for new loans as economic storm clouds loom.
This was particularly evident in commercial and industrial lending, and it stands in stark contrast to the growing complacency on display in credit markets as credit spreads narrow further.
Another piece of evidence to suggest caution on the soft landing/Fed pivot relief euphoria that seems to be dominating the market narrative at the moment…
Key point: Tighter lending standards point to upside risk for credit spreads.
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Topics covered in the latest Weekly Insights Report
Aside from the chart above, we looked at several other charts, and took a bite out of some really important macro/asset allocation issues right now:
Risk-Onwards: a look at the cross-asset shift in mood.
REIT Rebound: why REITs are positioned well for a certain scenario.
Global PMI Pulse: weaker growth, easing backlogs, fading price pressures.
Bond Yield Outlook: weighing up growth risk vs inflation risk for treasuries.
Credit Spreads: complacency takes hold while upside risks remain.
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