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2022/05/12 / Erste Group Research

No spring awakening on the credit markets

European market sentiment remains clouded, with sentiment indicators showing a differentiation: While industry, which is more dependent on global developments, continues to suffer from high energy and raw material prices, supply bottlenecks, distortions and increasingly also from the feedback effects of the sanctions against Russia, the more regionally determined services sector is showing slight signs of recovery.

The ECB is pursuing the approach of sequencing: First, securities purchases will be ended, and only then will a first interest rate hike follow. According to the ECB, the former should happen in the third quarter. Consequently, the second is not expected until July at the earliest.

The European corporate sector is largely unsettled in view of the uncertain developments. Corporate credit spreads have been in an upward channel for weeks and are already above the level at the outbreak of the war. Issuing activity is severely subdued and repeatedly comes to a standstill in the otherwise booming spring.

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General information

AuthorErste Group Research
Date2022/05/12
Languageen
Product nameCredit News
Topic in focusCredits/ Corporate bonds
Economy in focusAustria, Eurozone
Currency in focusEuro
Sector in focus-
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