20180621-穆迪服务-Investment-Grade_Looks_Softer_and_High-Yield_Looks_Firmer_Compared_With_Year-End_2007_26页_843kb

Moody's Weekly Market Outlook Summary

Core Content Overview

Moody's Weekly Market Outlook provides an analysis of credit markets, focusing on investment-grade and high-yield bond performance, default rates, issuance trends, and macroeconomic indicators across the U.S., Europe, and Asia-Pacific. The report highlights the relative stability of the U.S. credit markets in the face of trade-related uncertainties and outlines the implications of these trends on economic data and policy responses.

Key Points

Credit Market Trends

• Investment-Grade Bonds: The average investment-grade bond spreads at year-end 2018 slightly exceeded 129 bp, indicating a softening of credit risk.
• High-Yield Bonds: The high-yield spread may approach 425 bp by year-end 2018, showing a firmer market.
• Default Rates: Moody's forecasts a decline in the U.S. high-yield default rate from 3.7% in May 2018 to 2.0% in May 2019, suggesting improved credit quality.
• Bond Issuance:
  • In 2017, U.S. investment-grade (IG) bond issuance reached a record $1.508 trillion.
  • High-yield (HY) bond issuance also hit a record of $453 billion.
  • For 2018, IG issuance is expected to drop by 7.3% to $1.398 trillion, while HY issuance is likely to fall by 11.4% to $402 billion.

Ratings Analysis

• Medium-Grade Bonds: Account for 56% of the dollar amount of outstanding U.S. corporate bonds, far surpassing high-grade and high-yield shares.
• Baa3 Bonds: The lowest investment-grade rating, with a 2.28% default rate over five years, is more vulnerable to downgrades to speculative-grade.
• Outstandings:
  • Investment-grade bonds accounted for 66% of total U.S. corporate bond outstandings in Q1 2018.
  • High-yield bonds' share of total U.S. corporate bonds dropped from 18% in 2007 to 17% in Q1 2018.
  • Financial institutions' share of total U.S. corporate bonds remained high at 40% in Q1 2018.

Market Outlook by Region

United States

• Trade Tensions: The U.S. has imposed tariffs on Chinese imports, with the Trump administration considering an additional $200 billion in tariffs. This could lead to more severe macroeconomic impacts if trade tensions escalate further.
• Economic Impact:
  • A $250 billion tariff increase (50% of U.S. imports from China) could reduce U.S. real GDP by 0.4 percentage points and cut employment by 550,000 jobs.
  • The NAHB housing market index fell from 70 in May to 68 in June, indicating a slight weakening in builder sentiment, likely due to trade-related policy uncertainty.
• Housing Data:
  • Housing starts improved in May but were concentrated in the Midwest.
  • Single-family permits fell, suggesting weaker residential investment.
  • Existing-home sales dropped in May, indicating inventory constraints may be affecting sales rather than mortgage rates.

Europe

• Inflation: Euro zone inflation is expected to remain steady at 1.9% in Q2 2018, with energy prices being a key driver.
• Core Inflation: Services inflation is projected to correct slightly after the Easter-related jump, while core goods inflation is expected to rise to 0.4%.
• ECB Policy: The ECB is likely to end its asset purchase program in December 2018 and reduce monthly purchases to €15 billion. Rate hikes are expected in the third quarter of 2019.
• Economic Indicators:
  • Business and consumer sentiment in the Euro Zone are expected to show some improvement.
  • France and Germany's unemployment rates are likely to remain stable.

Asia-Pacific

• Japan:
  • May activity data are expected to show improvement, with industrial production rising and retail sales likely to increase by 1.4% y/y.
  • The unemployment rate is expected to remain at 2.5%.
  • The Bank of Japan's core CPI is projected to rise to 0.9% y/y, slightly above April's 0.8%.
• Bank Indonesia: Increased the policy rate by 25 basis points to 4.5% in May to counter capital outflows and stabilize the currency.
• New Zealand: Maintained the Official Cash Rate at 1.75% in June, with interest rate normalization likely to begin in early 2019, possibly delayed due to lower inflation expectations.

Key Metrics and Forecasts

• Moody's EDF Metric: The average expected default frequency (EDF) for U.S. high-yield issuers dropped from 2.28% on June 14 to 2.10% on June 20.
• VIX Index: Remained below its long-term median of 15.9, despite increased volatility.
• Outstandings Growth:
  • Investment-grade bonds grew at a slower pace than before the 2008-2009 crisis.
  • Nonfinancial corporate bonds showed faster growth than financial institution bonds.
  • High-yield outstandings have not mirrored the growth patterns seen before the Great Recession.

Summary Table of Key Indicators

Conclusion

The report outlines a cautiously optimistic outlook for the U.S. credit markets, with investment-grade bonds showing signs of softening and high-yield bonds remaining firm. Trade tensions are a key concern, but the impact is expected to be moderate unless they escalate further. In Europe, inflation remains elevated, with energy prices as a primary driver, and the ECB is expected to gradually tighten monetary policy. In Asia-Pacific, Japan's economy shows signs of recovery, while New Zealand and Indonesia maintain cautious monetary policies. Overall, the market is expected to continue its gradual recovery, with some sectors showing stronger performance than others.