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.

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RATING AGENCIES SHOW THEIR TEETH

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