20170119-穆迪服务-Deregulation_Seen_to_Spur_Growth,_Trim_Risk_25页_529kb

Moody's Weekly Market Outlook Summary

Core Content

Moody's Weekly Market Outlook provides a detailed analysis of credit markets, economic indicators, and regulatory changes impacting global financial conditions. The report highlights the potential for economic growth due to deregulation, assesses credit market trends, and outlines key economic data releases for the US, Europe, and Asia-Pacific regions.

Main Views

• Deregulation and Growth: The report suggests that deregulation in the US, particularly in business and health care, could stimulate economic activity without immediate tax costs. However, it also warns that deregulation may reintroduce systemic risks over time.

• Credit Market Outlook:

  • Investment Grade Credit Spreads: Expected to exceed 118 bp by year-end 2017.
  • High Yield Credit Spreads: Projected to narrow from 405 bp to around 520 bp by year-end 2017.
  • Default Rates: The US high-yield (HY) default rate is forecasted to drop from 5.7% in December 2016 to near 3.9% by 2H 2017.
  • Bond Issuance: US$-denominated investment-grade (IG) bond issuance is expected to grow by 1.5% in 2017 to $1.426 trillion, while HY issuance may increase by 3.3% to $351 billion.

• Economic Growth Constraints: Despite the potential for growth, long-term economic expansion may be limited to around 2% due to slow labor force and productivity growth. The Trump administration's goal of 3% to 4% real growth may be temporarily achievable if demand materializes.

• Profit Growth and GDP Correlation: The consensus projection of 5% annual profit growth is at odds with a 4.4% GDP growth forecast. Profit growth requires faster GDP growth than anticipated, which may not be sustainable given current economic conditions.

Key Economic Indicators

United States

• Existing Home Sales (Dec): Forecast to decline after reaching a nine-year high in November.
• New Home Sales (Dec): Expected to dip slightly, but the long-term trend remains strong.
• Leading Economic Indicators (Dec): Projected to rise by 0.5%, driven by stock prices and consumer confidence.
• GDP (Q4): Forecast to grow by 2.1%, but a widening trade gap may slow growth.
• Durable Goods Orders (Dec): Expected to increase by 2.2% overall, with a 0.4% increase excluding transportation.
• Consumer Sentiment (Jan Final): Forecast to show a mild decline from December's high, but inflation expectations are rising.

Europe

• UK CPI (Dec): Inflation is expected to rise to 1.5% y/y, surpassing the Bank of England's 2% target.
• UK Unemployment (Nov): Headline ILO-harmonized unemployment rate likely remains at 4.8%, but signs of labor market slowdown are emerging.
• Euro Zone CPI (Dec): Annual inflation is expected to reach a 3.5-year high of 1.1%, with energy and food prices contributing significantly.
• ECB Monetary Policy (Jan): The ECB is expected to keep monetary policy unchanged in January, though inflation acceleration may prompt future reassessment.

Asia-Pacific

• Taiwan GDP (Dec): Likely to show stronger growth, driven by export demand and domestic factors.
• Philippines GDP (Dec): Expected to continue its seven-quarter growth acceleration due to sustained domestic demand.
• China Fixed Asset Investment (Dec): Mild increase, but overcapacity remains a key constraint.
• China GDP (2016Q4): Maintained steady growth, supported by housing and manufacturing, despite challenges in heavy industry.
• China Retail Sales (Dec): Expected to grow by 10.6%, though subsidies for energy-efficient vehicles may not last long.
• Japan Foreign Trade (Dec): Trade surplus likely increased due to the weaker yen, though rising commodity prices may offset some gains.
• South Korea Consumer Sentiment (Jan): Forecast to remain low at 94.6, impacted by the Samsung scandal and weak wage growth.

Key Figures

• US IG Bond Issuance 2017: $1.426 trillion (+1.5%).
• US HY Bond Issuance 2017: $351 billion (+3.3%).
• UK CPI (Dec 2016): 1.5% y/y.
• Euro Zone CPI (Dec 2016): 1.1% y/y.
• China GDP (2016Q4): 6.7% y/y.
• Taiwan Industrial Production (Dec): 8.4% y/y.
• Taiwan Domestic Trade (Dec): 4.5% y/y.
• South Korea Retail Sales (Dec): 1.7% y/y.
• Japan Trade Surplus (Dec): ¥610 billion.

Conclusion

The report outlines a cautiously optimistic outlook for credit markets and economic growth, driven by deregulation and improved industrial activity. However, it also highlights risks such as inflation pressures, trade uncertainties, and the long-term limitations on growth due to demographic and structural factors. The US and European markets show signs of resilience, while Asia-Pacific economies face mixed conditions with some growth potential and others facing headwinds.