Persistent supportive funding conditions and the improved macro picture are consistent with a current and expected benign picture for US and European default cycles, which are likely to remain on a downward trend in the coming months.
Emerging markets’ high yield corporate default rate remains quite low and we expect a further decrease in the next month. Higher risk in China, in particular in the property sector. Beijing will continue with financial de-risking and reducing housing sector leverage but systemic financial risk will be prevented.
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