Weekly Comments on Credit
Global Market Summary: Incoming U.S. economic data and new measures by the Chinese government to support the equity markets impacted global credit market sentiment this week. Continued strength in U.S. economic data led market participants to further scale back their expectations for near-term policy easing, while China took additional steps to stabilize equity market sentiment and restore confidence to the housing sector. In Europe, the data flow continued to show some stabilization of growth at relatively weak levels. Spreads across major credit sectors generally tightened, and total returns were mixed. U.S. investment grade corporate bonds underperformed Emerging markets hard currency debt — both sovereign and corporates — and U.S. high yield bonds. The U.S. dollar appreciated against the euro and the average spot currency performance in emerging markets was negative for the week.