TwentyFour

Corporate hybrid issuance is on track for a record year in both Europe and the US, driven by expanding supply well beyond the traditional utilities, energy, and telecoms issuers.

European high yield (HY) credit, which had proved resilient to start 2026 despite growing concerns over AI risks, came under pressure in March as the Iran war disrupted global trade and weighed heavily on risk appetite.

Markets have entered another week with geopolitical headlines as the major driver of price action, and with uncertainty running high, we think the likelihood of spreads revisiting their tights of this year has reduced.

With no end in sight to the US-Israeli war with Iran, and tensions escalating once again over the weekend, investors are bracing for more volatility. Inflation fears have ramped up significantly, reflected clearly in government bond markets where rising yields show rate cuts being priced out and rate hikes increasingly being priced in.

Despite the oil price hanging on every word from the White House and volatility in everything from equities to government bonds, we saw a record day for US corporate bond supply on Tuesday led by a blockbuster deal from Amazon.

Collateralised Loan Obligation (CLO) markets have repriced meaningfully over the past few weeks, with a sell-off in software-related loans leading to even more spread “tiering” as investors differentiate between managers with lower exposure to stressed sectors and those carrying more tail risk.

As the US-Israeli military operation in Iran enters its fourth day, markets are continuing to react to rhetoric from both sides and attempting to gauge how long the conflict may last and what the impact will be on the local and global economies.

We have had an eventful few weeks of AI-driven volatility in markets, with markets seemingly swinging from “everyone’s a winner” to “everyone’s a loser” faster than technological progress itself.

With most European banks having now reported their full-year 2025 results, we see the sector carrying solid momentum into 2026.

News of governments achieving their budgetary objectives or borrowing less than market forecasts has been a rarity in the last few decades.

Issuers in corporate credit have started this year on the front foot, capitalising on the current supportive market conditions and front loading their funding plans in anticipation of higher funding needs from the hyperscalers in the US, among other factors.

As Jerome Powell enters his final months at the helm of the Federal Reserve (Fed), market participants have been busy analysing the past speeches of his nominated replacement, Kevin Warsh, with the aim of forming a view as to how his hand is likely to be played.