Following the ECB policy announcement yesterday, we were very constructive on the outlook for credit and equities in the Eurozone, which we discussed last night.  Below, we chart the credit default swap spread for the investment grade (“Main”) and high yield (“Xover”) CDS indices tracking European corporate default risk.  As shown, default risk pricing has plummeted off recent highs over the last month or so.  Given the introduction of several new ECB policies yesterday (expanded QE; purchases of nonfinancial, investment grade corporate debt; new refinancing programs; incentives to reduce the impact of negative interest rates on banks and spur lending) we think the outlook for European credit and equities is quite constructive.  There’s more detail in The Bespoke Report tonight; sign up for a free trial now to receive it in your inbox this evening!

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