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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

Credit Conditions – Global Coronavirus and oil price shocks: managing ratings in turbulent times

17 MARCH
2020
Given sharply lower global growth expectations and acute market volatility, we have taken some rating actions already in the most affected sectors and expect to take more in the coming weeks. These actions reflect the breadth and severity of the shock, and the broad deterioration in credit quality that it has triggered.

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Recession risks
Lower-for-longer interest rates
Political risks
Trade tensions
Disruptive technologies
ESG impact
Research Highlight
Cross-sector
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10 FEBRUARY
2020
Key ESG themes influencing credit in 2020; a summary of the key ESG considerations impacting individual sectors as discussed in our 2020 Outlooks.
The twin shocks are exposing sovereigns’ vulnerabilities and will sharply lower GDP growth in 2020. We currently assume the crisis will be short-lived, with growth resuming in the second half of 2020 and limited sovereign credit implications.
Research Highlight
/
27
March
2020
Default rates poised to rise as coronavirus-induced economic turmoil intensifies
Corporate defaults are likely to climb as the coronavirus outbreak continues and oil prices remain low. Under a scenario of a sharp-but-short economic downturn, we project the trailing 12-month global speculative-grade default rate will
Research Highlight
Cross-sector
/
25
March
2020
The coronavirus will cause unprecedented shock to the global economy
We project a contraction in global economic growth in 2020 as the rising costs of the coronavirus outbreak and the policy responses to combat the downturn are becoming clearer.
Research Highlight
Sovereign & Supranational
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20
March
2020
Coronavirus, oil price shock magnify weaknesses highlighted in negative 2020 outlook for global sovereigns
The twin shocks are exposing sovereigns’ vulnerabilities and will sharply lower GDP growth in 2020. We currently assume the crisis will be short-lived, with growth resuming in the second half of 2020 and limited sovereign credit implications.
25
Mar
2020
/
Corporates
Government coronavirus aid will benefit strong, strategically vital companies
Government support to combat the economic damage of the coronavirus is highly likely for sectors of strategic or significant national importance and for other sectors that are important sources of employment.
20
Mar
2020
/
Sovereign & Supranational
Coronavirus, oil price shock magnify weaknesses highlighted in negative 2020 outlook for global sovereigns
The twin shocks are exposing sovereigns’ vulnerabilities and will sharply lower GDP growth in 2020. We currently assume the crisis will be short-lived, with growth resuming in the second half of 2020 and limited sovereign credit implications.
4
Mar
2020
/
Banking
Fed cuts funds rate to counter coronavirus outbreak, increasing pressure on US bank profitability
The Federal Reserve's 50-basis-point rate cut will depress US bank profitability as their net interest margins decline.
12
Feb
2020
/
US Public Finance
Pension investment volatility risk will persist in 2020
Our 2020 “risk-return map” illustrates the significant investment risk facing many state and local governments via their high return-seeking pension systems.
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5
Mar
2020
/
Sovereign & Supranational
Government of Israel: Third consecutive inconclusive election will prolong policy inertia
Assuming that a government is formed, the 2020 budget will be the first important indication of the new government's fiscal strategy and capacity to address Israel’s fiscal deterioration.
2
Mar
2020
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Cross-sector
Chile’s government and industry grapple with slower growth amid threat of renewed protests
The effects of ongoing violent protests since October 2019 and any new upsurge in violence this year will weigh on Chile’s economic growth through 2021.
20
Feb
2020
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Trade disputes pose threats to China's tech sector development
China-US trade relations remain strained despite the recent phase-one trade agreement, with potential long-lasting ramifications for China’s high- and mid-end technology sectors.
10
Feb
2020
/
Cross-sector
Potential escalation of US-China and US-EU tensions presents risks to global trade outlook
In this Global Trade Monitor, we discuss how risks of tensions between the US and China will continue. US-EU trade negotiations are also proving challenging, while the possibility of US tariffs on imported autos and parts continues to loom.
18
Mar
2020
/
Cross-sector
Cyber risks will rise as attackers seek to capitalize on coronavirus fears
Coronavirus-themed phishing attempts and malware attacks will likely increase, while some issuers will more closely scrutinize their cybersecurity budgets in response to unexpected financial pressures.
27
Feb
2020
/
Structured Finance
Podcast: Securitization technologies often improve underwriting but also heighten risk
Jody Shenn and Pedro Sancholuz Ruda from the Structured Finance team discuss how technologies like alternative data, machine learning, blockchains and document digitization can help to improve the accuracy and efficiency of asset origination or under
17
Mar
2020
/
Cross-sector
Deepening ESG focus in emerging markets will spur growth in sustainable debt
Emerging market economies are particularly susceptible to environmental, social and governance risks, and face immense investment needs to finance sustainable development.
12
Mar
2020
/
Cross-sector
Podcast: How we use scenarios to gauge credit impact of climate risk
James Leaton and Khalid Husain of the ESG team discuss how we use scenario analyses to assess the credit implications of carbon transition and physical climate risks. ​​​
12
Feb
2020
/
US Public Finance
Pension investment volatility risk will persist in 2020
Our 2020 “risk-return map” illustrates the significant investment risk facing many state and local governments via their high return-seeking pension systems.
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