Government bond yields recently hit new all-time lows in Europe, indicating a deteriorating economic environment. Credit spreads, in contrast, still trade at 'strong-growth' levels. Is this another break in traditional correlation patterns?
We don't think so. The relationship is still intact from a pure fundamental point of view. Despite stagnating economic growth in Europe, macro fundamentals are strong enough to support credit markets, although positive impulses from the macro environment
The week on Risk.net, July 7-13, 2018Receive this by email