The Big Picture

Key themes shaping global credit markets

Find out how political risks, ESG and other themes will affect market segments including banking, corporates and insurance.
2020 CREDIT THEMES
Access Moody’s industry-leading analysis across topics such as recession risks, trade tensions and disruptive technologies.
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Risks to credit conditions rise as the global slowdown takes hold

Global Credit Conditions Outlook

Watch Anne Van Praagh of the Credit Strategy & Research team discuss our outlook for the global credit environment in 2020. Overall, we expect credit conditions to weaken as a result of lackluster economic growth, trade policy uncertainty and the effects of an unpredictable political and geopolitical situation. 

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Recession risks
Lower-for-longer interest rates
Political risks
Trade tensions
Disruptive technologies
ESG impact
Credit Trends 2020
BEGINNING IN EUROPE
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14
JANUARY
2020
Navigating a more fractured world – looks into the impact of increasing polarization, geopolitical risks and the low or negative interest rate environment
Emerging market sovereigns, pharmaceuticals and automotive manufacturers are among the largest sectors facing high social credit risk.
Research Highlight
Cross-sector
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21
November
2019
Outlook negative for global emerging markets in 2020 as risks rise on trade, policy and politics
Our negative outlook reflects continued slowing global and emerging market growth, with shifts in trade policy, political priorities and financial flows. Against this backdrop, emerging market debt issuers are more vulnerable to sudden shocks.
Research Highlight
Cross-sector
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14
November
2019
Global Macro Outlook 2020-21: Global growth will remain sluggish as large engines of economic activity slow
We do not expect the global economy to enter a recession in 2020 or 2021. However, the current economic environment is characterized by structurally low growth, low inflation and limited policy space.
Research Highlight
Cross-sector
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25
October
2019
Introducing Moody’s Social Risks Heat Map
Emerging market sovereigns, pharmaceuticals and automotive manufacturers are among the largest sectors facing high social credit risk.
2
Dec
2019
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Cross-sector
China’s economic slowdown is poised to continue
Policy focus is shifting toward maintaining stability as trade uncertainty continues to weigh on China’s economic outlook. As a result, public sector leverage will rise modestly, led by state-directed investment.
11
Nov
2019
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Sovereign & Supranational
Negative 2020 outlook for sovereigns globally as unpredictable, disruptive political environment exacerbates credit challenges
An increasingly antagonistic global political environment is exacerbating the gradual growth slowdown, weakening institutional strength and raising the risk of economic or financial shocks.
19
Nov
2019
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Financial Institutions
Fresh fall in rates adds to pressure on life insurers’ profitability and economic solvency
Low rates are once again the key risk facing insurers globally, forcing the sector to accelerate its shift towards a less interest rate-sensitive business model.
13
Sep
2019
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Banking
ECB's introduction of deposit tiering system will mitigate effect of low interest rates on EU banks’ margins
The new two-tier remuneration of ECB reserves, will reduce by around €2 billion the annual charge paid by EU banks on their liquidity placed at the central bank.
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18
Nov
2019
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Sovereign & Supranational
Populist movements associated with weakening credit fundamentals
Populist political movements and agendas are increasingly shaping national and regional policy debates, particularly in advanced economies. These movements are highly diverse, and their credit implications are likely to be uneven.
6
Nov
2019
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Sovereign & Supranational
Income inequality in Europe is associated with weaker institutional strength
The EU has some of the lowest levels of income inequality in the world, but levels have risen over the last 30 years. Income inequalities can increase political risks, slow reform momentum, generate spending pressures and weaken long-term growth.
28
Oct
2019
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Corporates
Potential US-China trade deal reduces immediate risk to Chinese companies' revenue growth
If US tariffs rise, the indirect negative effects on Chinese companies would be widespreadgiven the large number of companies involved in supply chains.
17
Oct
2019
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Cross-sector
Europe's concentrated trade exposure to China restricts risks to certain countries and sectors
China's ongoing trade tensions with the US, slowing growth and the rebalancing of its supply chain away from imports present risks for a number of countries in the European Union.
25
Nov
2019
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Sovereign & Supranational
Cyberattacks on governments are rising globally but pose limited risks to credit quality
The growing trend toward digitization has increased governments' exposure to cyberattacks. But governments typically oversee large, diversified economies and have fiscal resources that help insulate them from negative effects of an attack.
12
Nov
2019
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Sovereign & Supranational
Digital technologies likely to enhance credit profiles for countries that leverage benefits while managing disruptions
The benefits from automation, AI and digitalization are likely to be spread unevenly because of differences in environments conducive to innovation, fiscal buffers and wealth.
20
Nov
2019
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Sovereign & Supranational
China’s emerging current account deficit will challenge long-term financial stability, posing risks to credit quality
A shift into deficit – as China’s rapidly ageing population and other social trends drive savings lower – could weigh on the sovereign's credit profile if it happened faster and to a greater degree than we currently expect.
4
Nov
2019
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Corporates
Automotive manufacturing – Global: Substantial variation exists in automakers' carbon transition risk profiles
The median score for the 20 leading automakers we examined in this report is CT-6, indicating moderate positioning for carbon transition on our 10-point CTA scoring scale.
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