Europe: The spike in credit flows was driven by companies tapping their credit lines.
China: Investors are concerned about the deluge of off-balance-sheet bonds from local governments (2 charts).
And corporate bond issuance spiked as well.
Energy: The Saudis are cutting oil output again and “encouraging” other producers to do so as well.
Though, the demand loss this year has been much larger than the OPEC+ cuts.
Credit: Many leveraged loan borrowers have blown through their covenants as earnings collapse. A good percentage of them have been able to get a reprieve from their lenders, often in return for more favorable terms (such as a higher spread).
Rates: The velocity of money is hitting record lows (massive amounts of liquidity but not much economic growth). Some view this trend as disinflationary.
Food for Thought: Working from home permanently:
Edited by Devon Lall
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