While trade frictions attracted the most attention, the primary and outsize drag on global growth in 2018 was the self-imposed slowdown China began in mid-2017. Intended as a gentle cooling, the deleveraging and derisking program overshot; China’s private sector — 60% of its economy — iced up.
Credit spreads came under pressure in November from issues plaguing markets throughout the year — geopolitical worries about Italy and Brexit, expectations of slower growth and inflation, US-China trade tensions, and a hawkish Fed.