Macro Insights Weekly - Credit rally amidst monetary tightening

20 May 2024


  • Global credit markets continue to rally, defying a repricing of the timing and depth of monetary easing. Short of an inflation rebound-driven selloff, the rally could have legs.
  • The rally is underpinned by still-ample liquidity in the financial system.
  • Spread compression notwithstanding, credit yields are attractive in absolute terms.
  • Constructive credit sentiment is also centred around expectations of forthcoming disinflation.
  • Beyond the US, Asian credit has gained in value in virtually all sectors. 
  • China's growth supportive measures could keep the rally going.