20150618-穆迪服务-Default_Risk_Rises,_Rate_Risk_Falls_22页_427kb

Moody's Weekly Market Outlook Summary

Core Content

Moody's Weekly Market Outlook provides a comprehensive analysis of credit market conditions, default risk, rate risk, and key economic indicators across the US, Europe, and Asia-Pacific regions. The report highlights the evolving dynamics in financial markets, particularly in the context of monetary policy and economic performance.

Main Views

• Default Risk Rises: The report indicates that the risk of default is increasing, especially in the high yield market, where spreads have widened significantly. The high yield spread reached 477 bp, up from 331 bp in June 2014, and the average high yield EDF (Expected Default Frequency) metric has risen to 3.61%, the highest since December 2012.

• Rate Risk Falls: The Federal Reserve's lack of clarity on a potential rate hike in September 2015 has led to a decline in market expectations for the fed funds rate. The futures market now expects the rate to be no higher than 0.50% by year-end 2015, down from 0.625% in March 2015.

• Credit Market Response Mixed: While equities rallied due to the Fed's dovish stance, the credit market showed a mixed reaction. The 2-year Treasury yield dropped by 5 bp, but the 10-year and 30-year yields increased, indicating a shift in investor sentiment toward longer-term assets.

• Wage Growth and Labor Market: Wage growth is expected to slow in June to 0.1% from 0.3% in May, as the labor market remains slack. The report suggests that wage pressures are unlikely to rise significantly due to weak business sales and a still underperforming economy.

• Global Economic Outlook: The report forecasts continued challenges for emerging markets, with base metals prices hitting a five-year low and the industrial metals price index declining by 17% year-to-date. These trends are linked to weaker economic activity and reduced demand.

Key Information

Credit Market Metrics

• Investment Grade Bond Spread: Expected to rise to 143 bp by year-end 2015, similar to its recent level.
• High Yield Bond Spread: At 477 bp, it is the highest since June 2014. The EDF metric has increased to 3.61%, signaling heightened risk.
• Predicted High Yield Spread: According to a regression model, the spread is expected to be 443 bp, which is above the June 2014 prediction of 357 bp.

Default Rates

• US High Yield Default Rate: Projected to rise from 1.9% in May 2015 to 3.1% by spring 2016, reflecting deteriorating corporate credit quality.

Economic Indicators

United States

• Existing Home Sales (May): Forecast at 5.23 million, suggesting a potential record high.
• Durable Goods Orders (May): Expected to increase by 0.8% ex-transportation, indicating improved demand in the industrial sector.
• New Home Sales (May): Forecast at 513,000, with a slight increase from April.
• GDP (Q1): First quarter GDP growth is forecast at -0.3%, but the outlook for Q2 is more positive.
• Personal Income & Spending (May): Income growth is expected at 0.5%, and spending at 0.6%, supported by rising wages and low oil prices.
• Consumer Confidence (June Final): Projected to rise to 94.2, following a decline in May.

Europe

• Greece: A potential exit from the euro zone is increasingly likely, which has contributed to higher sovereign bond yields in the euro zone periphery.
• Euro Zone Balance of Payments (April): Expected to show a surplus of €18.5 billion, but risks include a slowdown in demand from oil-exporting countries and China.
• Germany:
  • Producer Price Index (May): Forecast at -1.3%, with weak inflationary pressures.
  • ZEW Indicator (June): Expected to fall to 41, reflecting continued economic uncertainty.
  • House Price Index (May): Projected to rise 6.2% y/y, driven by weak supply and low unemployment.
• France:
  • Business Confidence (June): Expected to rise to 104, with signs of a modest recovery.
  • Consumer Confidence (June): Likely to remain weak, with the index at 94.
• Italy:
  • Balance of Payments (April): Expected to show a surplus of €2.3 billion, but weak domestic demand may limit growth.
  • Industrial New Orders (April): Forecast at -0.3% y/y, indicating a slowdown in manufacturing.
  • Retail Sales (April): Likely to decline by -0.1% y/y, affected by high unemployment and weak wage growth.
• Spain:
  • Producer Price Index (May): Forecast at -0.9% y/y, with continued downward pressure on prices.
• Russia:
  • Producer Price Index (May): Expected to rise 15.5% y/y, driven by input price inflation.
  • Business Confidence (June): Likely to remain in negative territory at -6, due to weak demand and sanctions.

Asia-Pacific

• Japan:
  • Consumer Price Index (May): Forecast at 0.2% y/y, with core inflation weak at 0%–0.5%.
  • Unemployment Rate (May): Likely to remain at 3.3%, near a 20-year low.
  • Monetary Policy (June): The Bank of Japan is expected to maintain its expansionary stance, purchasing ¥80 trillion in assets.
• Taiwan:
  • Domestic Trade (May): Forecast at -1% y/y, with weak demand and pressure from China.
  • Industrial Production (May): Expected to fall 1.2% y/y, affected by China's economic slowdown.
• Hong Kong:
  • Foreign Trade (May): Forecast at a trade deficit of HK$31 billion, with weak exports and declining imports.
• New Zealand:
  • Foreign Trade (May): Expected to show a smaller trade surplus of NZ$60 million, with dairy exports under pressure.

Conclusion

The report underscores a global credit market environment marked by rising default risk and falling rate risk. While the Fed's ambiguity on rate hikes has led to a more cautious market stance, economic fundamentals in key regions like Europe and Asia-Pacific remain weak, contributing to continued pressure on credit spreads and corporate leverage ratios. The outlook for the coming week includes several important economic indicators that may provide further insights into the trajectory of global markets.