What to Watch in European Credit Markets This Week
- Credit spreads at widest since March 2016 as ECB pulls back
- Upbeat market sentiment backs year’s final surge in bond sales
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Good morning. Here’s what we will be watching this week:
What the European Central Bank gives, it can also take away. Credit spreads of European investment-grade credit have widened out to levels last seen in March 2016, before the ECB announced plans to buy corporate bonds. That program, which has accumulated some $200 billion of securities and lowered borrowing costs to unprecedented levels, is now set to wind down. This removes a key technical support for a market already pretty battered from negative newsflow.