Deutsche Bank predicts that the US corporate default rate will spike to 10 per cent

Jim Reid writes Deutsche Bank’s annual Default Study. The 24th one just landed in FT Alphaville’s inbox, and, as ever, it makes for interesting reading.

First of all, it is remarkable just how tranquil a period it has been for corporate debt.

Robin Wigglesworth and George Steer FT 7 June 2022

https://www.ft.com/content/0239a35f-53f7-4d96-b39a-417ff2bc7db7

European corporate bonds hit by steepest sell-off in at least 20 years

 FT 12 May 2022

https://englundmacro.blogspot.com/2022/05/european-corporate-bonds-hit-by.html

The near 40-year trendline will almost certainly have to end in the next few years 

If the post-Global Financial Crisis cycle “could be erased from people’s memory banks,” then markets might be pricing 300 to 400 basis points of hikes this year rather than around 240 basis points now priced in, Reid wrote in his note highlighting the chart.

MarketWatch 28 March 2022

https://englundmacro.blogspot.com/2022/03/the-near-40-year-trendline-will-almost.html