Corporate Bonds
Credit-selection driven approach aiming to find value, anticipate trends, and capture rising stars within corporate bond markets.
Global Credit Outlook for 2026: Still waters or into the wild?
Fixed Income Boutique
We’re just over a week into 2026, and the year has already brought significant developments. Recent geopolitical events, including U.S. actions in Venezuela and assertive rhetorics around Greenland, have raised important questions for financial markets: Will the months ahead bring stability or volatility?
To provide clarity, we’ve prepared the attached Global Credit Outlook deck (click the button below to download it). It offers key insights into the trends shaping the credit markets as we begin 2026.
Here’s a quick overview of the main takeaways:
Key takeaways
- Macroeconomic Trends: Global growth remains steady, but the U.S. job market is cooling. Central banks are taking different paths, with the Fed potentially cutting rates this year. The big question remains: stimulate growth or fight inflation?
- Corporate Credit Health: Companies are in good shape, with stable or improving credit metrics. However, there’s a growing risk of “fallen angels” (investment-grade bonds being downgraded to high yield).
- Bond Issuance and Investor Appetite: AI-related capital expenditures are expected to be significant, with funding needs for data centers and related infrastructure projected to grow substantially (i.e. based on Bloomberg estimates around USD 5.4 trillion over the next 5 years for Meta, Amazon, Alphabet and Microsoft alone). Global corporate bond issuance is anticipated to reach record levels in 2026, driven by AI investments and increased M&A activity with investor demand for bonds remaining strong, supported by high yields despite tight credit spreads.
- Opportunities in Valuation: Despite tight credit spreads, yields remain appealing. There’s also significant variation across credit categories, creating opportunities for targeted investments.
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