Bangkok--12 Dec--Standard & Poor's
Global bond markets are entering 2007 with a decent tailwind, apparently shrugging off concerns about increasing leverage and a deteriorating rating mix, according to an article published today by Standard & Poor's. The article, which is titled "2007 Global Credit Strategy: Asset Class Outlook," says that the relative maturity of the credit cycle upswing phase implies that the market will continue to tread water in 2007, particularly since the anticipated effects of monetary tightening did not take hold in 2006.
"We believe that factors such as globalization, more sophisticated methods of risk transfer, and the entry of new players might have succeeded in prolonging the duration of this upturn," noted Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "However, an eventual re-adjustment will occur. It is very difficult to escape the credit cycle course of events, though the timing and severity of a correction have benefited from a unique set of factors this time around."
We believe 2007 will be a transition year to more normal conditions. Our projections are set against a less optimistic economic backdrop in 2007, with the two main pillars of growth in the world economy--the U.S. and China--forecast to decelerate from current levels. The baseline forecast projects a soft-landing scenario, with weakness in the U.S. partially offset by reasonably strong growth in Europe and Japan, though neither is expected to close the growth gap vis-?-vis the U.S.
The report is available to subscribers of RatingsDirect, the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, at www.ratingsdirect.com . If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-9823 or sending an e-mail to [email protected] . The report is also available at www.sandp.com/gfir , listed under Global Fixed Income Research. If you have not previously registered with the site, you will need to do so to access this material. Registration requires minimal information and is free. Members of the media may request a copy of this report by contacting the media representative name provided.
Media Contact:
Mimi Barker, New York (1) 212-438-5054, [email protected]
Analyst Contacts:
Diane Vazza, New York (1) 212-438-2760