20160705-穆迪服务-The_Brexit_of_Champions_21页_519kb

Moody's Weekly Market Outlook Summary

Core Content

Moody's Weekly Market Outlook provides an analysis of the impact of Brexit on global credit markets and outlines key economic indicators for the US, Europe, and Asia-Pacific regions. The report highlights that while Brexit has caused significant short-term market volatility, its long-term effects on the US economy may be less severe than anticipated, drawing comparisons to past events like Y2K and Lehman Brothers. It also discusses the resilience of industrial commodity prices and the ongoing challenges in global economic growth.

Main Points

• Brexit Impact on Credit Markets:

  • Traders who were long high-quality, long-duration credit and gold, and short equities before the June 23 referendum were rewarded.
  • The UK's FTSE 100 index recovered significantly, while the Stoxx Europe 600 index also rebounded after a sharp drop.
  • The US equity market showed a moderate recovery, with high-yield bonds outperforming the broader market in total returns.

• Brexit vs. Lehman Brothers:

  • Brexit has not yet caused the same level of economic disruption as Lehman's collapse in 2008.
  • The report suggests that the US is not immediately at risk from Brexit, with credit spreads and financial market conditions remaining stable.

• Credit Market Indicators:

  • Investment Grade Credit Spreads: Expected to remain close to 147 bp by year-end 2016.
  • High Yield Credit Spreads: Projected to rise to 650 bp by year-end 2016, but have already narrowed from a peak of 670 bp on June 27.
  • Default Rates: US high-yield default rate is forecast to reach 6.4% in Q4 2016, up from 5.0% in May 2016.

• Bond Issuance Trends:

  • US investment-grade bond issuance is projected to increase by 3.4% to a record $1.371 trillion in 2016.
  • High-yield bond issuance is expected to decline by 16.1% to $297 billion.

Key Economic Indicators

The US

• ISM Manufacturing Index (June): Forecast at 51.3, indicating continued expansion.
• Construction Spending (May): Expected to rise by 0.6%, supported by improved residential investment.
• Vehicle Sales (June): Forecast at 17.3 million, suggesting a potential plateau after a spike.
• Factory Orders (May): Projected to decline by 0.5%, with renewed dollar strength and uncertainty affecting exports.
• Employment Report (June): Expected to show 180,000 nonfarm payrolls and a 4.8% unemployment rate, with long-term slowing employment trends.
• FOMC Meeting Minutes (July 1): Likely to show a cautious stance due to market volatility, with the Fed possibly on hold beyond late July.

Europe

• UK Unemployment (May): Expected to tick down to 10.1%, though headline and youth unemployment remain elevated.
• Euro Zone Unemployment (May): Likely to decrease slightly, with expansionary PMI data and labor market reforms supporting the trend.
• UK Political Developments: Possible second independence referendum in Scotland and ongoing political uncertainty in Spain.
• European Central Bank (ECB): May need to intervene to stabilize markets following the Brexit vote.

Asia-Pacific

• Australia's Trade Balance (May): Expected to narrow slightly to a $1.5 billion deficit, with services and tourism as key growth drivers.
• Australia's Retail Sales (May): Projected to rise by 0.3%, supported by low energy prices and accommodative monetary policy.
• Japan's Unemployment (May): Likely to remain at 3.2%, with weak wage growth and a tight labor market.
• Japan's Consumer Price Index (May): Forecast to decline by -0.4%, continuing deflationary pressures.
• South Korea's Trade Surplus (June): Expected to widen to $7.8 billion, but face pressure from weak Chinese demand.
• Taiwan's Inflation (June): Projected to rise to 1.2%, with commodity price rebounds providing some support.

The Long View

• Credit Spreads: Investment grade spreads are above historical averages, suggesting elevated risk. High-yield spreads may narrow due to improved macroeconomic conditions and a declining VIX index.
• Downside Risks: Despite short-term volatility, the US economy is not in immediate danger from Brexit. However, long-term downside risks remain, with slow business sales and profits contributing to credit risk.
• Industrial Commodity Prices: Resilient despite Brexit, with the industrial metals index rebounding after a sharp drop.
• Global Economic Vulnerabilities: Exchange rate volatility and weak export performance highlight fragility in the global recovery, with Brexit and other shocks potentially derailing it.

Summary of Key Outcomes

• Credit Markets:
  • Investment grade bonds have shown resilience, with yields falling and spreads narrowing.
  • High-yield bonds have outperformed equities in total returns, but spreads remain elevated.
• Global Economy:
  • Export performance is weak across major economies, signaling a fragile global recovery.
  • Commodity prices have held up, contradicting expectations of a global downturn.
• Monetary Policy:
  • Central banks are likely to maintain accommodative policies in response to economic uncertainty.
  • The ECB and RBA are expected to monitor market conditions closely before taking action.

Conclusion

Brexit has caused short-term market fluctuations but has not yet triggered the same level of systemic risk as previous financial crises. While the US appears relatively insulated, the global economy shows signs of weakness, particularly in export sectors. Credit markets have shown mixed responses, with investment-grade bonds benefiting more from the current environment. The report emphasizes the need for continued monitoring of economic data and potential policy interventions.