RATING AGENCIES SHOW THEIR TEETH

More countries are now discussing the exit strategy, i.e. how to progressively ease the lockdown measures. This must be a prudent process, given the risk of a new contagion wave.

Highlights:

  • More countries discussing and implementing lockdown exit strategy: slow and cautious.
  • Smart regulatory and monetary policy coordination in Europe aim at supporting lending.
  • Fitch has cut Italy’s rating to BBB-. To raise to the sovereign rating challenge, EU governments need to better work and act together.
  • Green financial shoots already? Despite dire economic and earnings news, cyclical stocks have outperformed this week. A swallow does not make a spring, but medical advances may have cheered investors up.
  • Stick to long positions in safe credit and duration.

Download the full publication below

RATING AGENCIES SHOW THEIR TEETH

RELATED INSIGHTS

COVID-19 FACTS & FIGURES
Sanofi and GSK are in advanced discussion with the European Commission to supply up to 300 million doses of an experimental Covid-19 vaccine.
FIRST Q2 EARNINGS RESULTS SHOW POSITIVE SURPRISES. EXPECT LIMITED NEGATIVE REVISIONS
Growth (yoy) is clearly negative but the magnitude should deteriorate further (to be in line with expectations) as more firms will report in the next few weeks: the next two weeks will see the bulk of reported results.
NO ECB SUMMER SURPRISE THIS YEAR, GOVERNING COUNCIL WANTS AGREEMENT ON RECOVERY FUND
After having augmented the volume of the Pandemic Emergency Purchase Programme (PEPP) in June, the Governing Council did neither act nor announced outright action at today’s meeting.