Euro Credit Outlook – Is investment grade the allocation of choice in 2023?

We wish you a happy, prosperous, and safe New Year with developed markets corporate bonds.

2022 started with two upward US inflation surprises and the Federal Open Market Committee signaling the start of their hiking cycle – one that has become to be known as the most aggressive for quite some time to ensure that higher inflation does not become entrenched. Traditional investment strategies worldwide unraveled and the reasons for the setback are well known by us.

We finished the year with another two inflation surprises, but this time downward. And although the year was difficult, also from a geopolitical and energy perspective, there are grounds for hope in 2023. We are overall positive about our European investment grade credit market as 2022 gives way to 2023.

The negative trends that have brought plenty to weigh down our hearts as investors have started reversing, and these tendencies should continue to be substantiated as we begin the new year. And who knows there could be additional positive surprises developing by the year end, especially that we have tended to forget good things can happen, too! Please find more details in our new Euro Credit Outlook.