Bloomberg Intelligence

“15bps of new issue premium is actually a notch difference” set the tone at our first Zürich Credit Club a week ago today. Are Rates Really That High? Fundamentals look good, margins have been going up despite higher interest costs and rates look less wide if one looks beyond the QE experiment. Higher long-end yields can be healthy if balancing market forces, such as growth and competition for capital. Negative rates-spreads correlation comes as part of an income-seeking environment and while it might not withstand a rates spike... “Maybe rates are actually not intolerably high?” Thinking about sweet spots. Carry has cushioned volatility, as hybrids and AT1 can attest given YTD returns vs govies. So, down in subordination in IG, up in the cap stack in high yield. RV (slightly) supports EU vs US, all things considered including FX basis. European names in non-EUR currencies still a source of alpha. Hyperscalers and the IG compression conundrum. The ratings-spreads-curves triangle in the higher echelons of IG has been distorted by price-insensitive issuers offering new issue premiums equivalent to a rating notch. It has taken the AA cohort wider, leading to compression from above rather than a “mere” spread rally. Explaining the BB-B spread gap? IG investors reach for BBs for carry at lower duration, while some very wide B-names pull the average out, with the remaining cluster at much tighter levels. Feeling the presence of Private Credit in HY? Weaker names refinancing via private credit have left the HY bond space. Seems mostly benign and could explain the low level of defaults we are seeing. Same AI trade, different downside risks. It’s possible that capex comes down given bottlenecks, regulation or slowdown. Hyperscalers should be fine as diversified but perhaps the same can’t be said of hardware. Datacentre bonds at BB+250. Worth doing the work! Wide dispersion in spreads and docs, with distinct risk stages depending on the time to become operational. High-quality tenant and relatively short completion should generate alpha for the first movers in a new asset class. Left-tail risks. Midterms probably a nothingburger. AI and ESG both push in an inflationary direction. Credit in a boiling-frog pan as LNG prices and high rates feed into the demand side of economy, pushing spreads wider. 🙏 Thanks to the Zürich credit community for the warm welcome and to our panellists for their candour: Maria Stäheli, CFA, Head of IG Credit Portfolio Management at Swiss Life Asset Managers Roland Hausheer, Head of High Yield at Swisscanto Asset Management International S.A We were: Aidan Cheslin (Hybrids, TMT), Antonio Barroso (Geoeconomics), Jeroen Julius and Ruben Benavides (Banks), and Tolu Alamutu (real estate). 📩 Presentations and BI analyst contact details are in your inbox (let me know if not). Hope you enjoyed this as much as we did. If you have a Bloomberg Terminal, you have all of Bloomberg Intelligence. We are just an IB away, Renato

#China has been shifting toward renewable #energy and away from fossil fuels for years, spurred by national-security concerns and its goal of achieving net-zero carbon emissions by 2060. But the transition has taken on new urgency due to the conflict in the Middle East, according to BI analyst Henik Fung. Bloomberg terminal clients can access full report: https://lnkd.in/dqE2D8TX

Now comes the brand test. On September 23, I will be joined by fellow Bloomberg Intelligence consumer analysts Deborah Aitken, Andrea Ferdinando Leggieri and Abigail Gilmartin to assess what our latest survey of 1,000 affluent mainland consumers means for luxury brands into 2027. We will examine: [1] How changing watch preferences could reshape demand across Richemont, Swatch Group etc. [2] What shifting jewelry demand means for LVMH’s Tiffany & Co., Chow Tai Fook Jewellery Group and Laopu Gold [3] Which bag brands are gaining desirability and whether that can translate into sales for Kering, Prada Group and Tapestry [4] Why premium outdoor growth is creating divergent prospects for Amer Sports’ Arcteryx, ANTA Sportswear’ Descente, Moncler and Canada Goose Register here: https://lnkd.in/gAvfD6Yn #China #LuxuryGoods #Consumer

Europe. Discuss. Over the last few days, we’ve had a too close to call election in Sweden, the AfD win in Saxony-Anhalt, a 10% probability that AI could wipe out humanity (?!), escalation in the Middle East, continued grey zone attacks in Europe, escalating Russian aggression across Ukraine and a White House line of commentary that might be construed as supportive of Russian. It feels like a good time to revisit the European question. If anything, one could make a case that Europe needs to be prepared to protect its economic interests further afield than just the eastern-most border with Russia. The Arctic remains an area where Europe lacks sufficient presence. Energy continues to be a problem and increasingly so with the freedom of passage through two key transit routes materially altered for the long term. So, what will Europe likely do? Given the recent furore around AI one would expect a continuation of the regulate-over-innovate practice, in a technology where it lacks native presence. According to the BI energy team, Europe will pay up for energy this winter which will have a knock-on impact for manufacturing. We look at a possible scenario of €100/MWh on Qatari LNG disruption and €120/MWh if the war escalates further. The midpoint of our forecast of €70-€100/MWh is 55% ahead of consensus! Although the EU and the UK are talking a good game on defense spending, the equity market is not convinced. Judging by the shift in geopolitical tectonic plates and a UK Chancellor reported to be on the cusp of walking back from the 3% of GDP target is it any wonder defence primes are taking a breather? Still too many questions on the reliability of the end customer. What Europe should do is find unity of purpose and spend spend spend…upwards of €14 trillion across tech, data centre supply chains, energy, food security, defense and critical inputs. It should spend out to 2035 and in the process change the culture in risk taking for small businesses and a capital market that supports financing, not hinder it. Will it? Probably not but please do listen to this Asia Centric podcast where my colleague John Lee and I talk about all the research and opinions provided by 30 of our analysts on how Europe might achieve strategic autonomy. Asia Centric: https://lnkd.in/eGfKnMHJ You can also find our deep dive report in the subject here: https://bit.ly/3SkEb2f #EU #geopolitics #AI #Defence #datacentres #energy #agriculture #manufacturing

Join Bloomberg Intelligence on September 22 for our next BDC Company Spotlight webinar featuring Bain Capital Specialty Finance CEO Michael Ewald, who also heads Bain Capital's Private Credit Group. Business development companies provide critical financing to middle-market companies — but strategy, underwriting discipline and portfolio construction can drive very different outcomes. In this Company Spotlight, we’ll explore what differentiates BCSF and get Michael’s perspective on the broader private-credit environment. Tuesday, September 22 | 2:00 p.m. ET Register here: https://lnkd.in/evbfh9v5 We’ll explore: * Why BCSF focuses on the core middle market * Bain Capital’s approach to credit and downside protection * Earnings, dividend durability and capital deployment * BCSF’s domestic and international investment vehicles * Michael’s outlook for opportunities across private credit Have a question you’d like me to ask Michael Ewald? Drop it in the comments. BDC HQ | Research. Data. Insights. YOUR destination for BDCs and private credit. #PrivateCredit #BDCs #DirectLending #MiddleMarket #CreditMarkets #Bloomberg

The Asia-Pacific region is undergoing a profound structural transformation, with rising bond yields, scrutiny over cross-border capital flows and shifting geopolitics. Returning for its third annual edition, the Bloomberg Intelligence APAC Financial Forum brings together BI analysts form around the world to unpack these complexities. What to expect: 💡 Analysis across #banking, #wealthmanagement and global #realestate 💡 How regional markets are positioning to attract institutional flows 💡 An exclusive in-person networking reception with wine and refreshments September 22. 3:30 PM Bloomberg Hong Kong Office Register here: https://lnkd.in/gXiic6Bu

Zürich Credit Club on Sep 16 | Strategists, Analysts and a Local Credit Panel 📣 New Speaker Announcement Higher rates, tighter spreads – what to do at the tights? Join us ⬇️ 📆 Wednesday, Sep 16 | 9:00 AM 📍 Bloomberg Zürich Office 📝 Register now: https://lnkd.in/eZ-pduVN Credit spreads are back near post-GFC tights, while higher rates continue to support the case for income. That leaves less compensation for credit risk, with value increasingly dependent on where you look across ratings, sectors, regions and capital structures. 💡 So, what to do at the tights? Join the Bloomberg Intelligence team alongside local credit-market participants: ➡️ Maria Stäheli, CFA, Head of IG Credit Portfolio Management at Swiss Life Asset Managers ➡️ Michael Hess, CFA, Head of Portfolio Management Corporates at BANTLEON 📣 NEW: Roland Hausheer, Head of High Yield at Swisscanto Fund Management Company Ltd. The discussion will range from central-bank trajectories and credit fundamentals to relative-value opportunities across ratings, sectors and capital structures, including AT1s, corporate hybrids and emerging markets. Come for the content, stay for the networking. #Zurich #InvestmentGrade #HighYield #Bonds #FixedIncome #PortfolioManagement #Switzerland Bloomberg Aidan Cheslin Tolu Alamutu Jeroen Julius Renato Prieto, CFA, CAIA Mahesh Bhimalingam

Zürich Credit Club | Higher rates, tighter spreads – what to do at the tights? Join us on Sep 16 ⬇️ 📆 Wednesday, 16 Sep | 9:00 AM 📍 Bloomberg Zürich Office 📝 Register now: https://lnkd.in/eZ-pduVN Credit spreads are back near post-GFC tights, while higher rates continue to support the case for income. That leaves less compensation for credit risk, with value increasingly dependent on where you look across ratings, sectors, regions and capital structures. 💡 So, what to do at the tights? ➡️ Discuss with the Bloomberg Intelligence team alongside local credit market participants, including: Maria Stäheli, CFA, Head of IG Credit Portfolio Management at Swiss Life Asset Managers Michael Hess, CFA, Head of Portfolio Management Corporates at BANTLEON The discussion will range from central-bank trajectories and credit fundamentals to relative-value opportunities across ratings, sectors and capital structures, including AT1s, corporate hybrids and emerging markets. Come for the content, stay for the networking. #Zurich #InvestmentGrade #HighYield #Bonds #FixedIncome #PortfolioManagement #Switzerland

Excited to be hosting our upcoming AI x AUTO session! Join us as the Bloomberg Research Content Acquisition team, #BloombergIntelligence, sell-side analysts, and industry experts unpack global automotive shifts and demonstrate how next-generation AI tools can enhance your equity research workflow. [AI x AUTO: Embodied AI & The “Go Global” Strategy of Chinese Automakers] Key Topics Include: - China Auto Outlook: 2H26 trends, global expansion strategies, and physical AI adoption - Global Autos Panel: European tariffs, regulatory shifts, US autonomous driving, and robotics convergence - AI-Powered Workflows: Integrating specialized auto datasets, company financials, and Bloomberg AI (ASKB) into a single, high-efficiency research process ✏ Register here (Lunch Provided): https://lnkd.in/gfEBJ2N6 📅 September 9 | 12:00–13:30 PM 📍 Bloomberg Hong Kong CKC office Speakers: Steve Man, Demian Flowers, Angus Chan, Andrew Siah Executive Guests: Gemma Buchan, Suhyung Sage Whether you are a portfolio manager, equity research analyst, or investment professional, this event will provide actionable market insights and practical AI tools. Hosted by: Regina Lin, Andrew Siah, Gilbert Xu, CQF, ATIF KASU, Coco (Yingzhong) Hu, FRM, Vivian （Wenjun） Li #Bloomberg #BloombergIntelligence #Technology #Auto #AI