Have Credits Peaked?

Where Are We In The Global Credit Cycle?

 

The Global Credit Cycle measures the riskiness of investing in the corporate credit markets. It is partly a derivative of the broader Global Liquidity Cycle and partly determined by investor positioning. We extract this data and show how it consistently leads the returns from both US and non-US high yield credit markets. Our research suggests: (a) the US credit cycle is running around 3 months ahead of other economies, and (b) the Global Credit Cycle is around its peak. This is not yet a signal to exit credit markets, rather a warning that conditions don’t get much better than this.