Three things in Credit that shouldn't coexist ❌ • First-loss bank debt: calmest asset in the market • Two IG-rated issuers: priced as junk • Fund managers: 3.5% cash, lowest since 1998 And much more in my Credit weekly email 👇

+10bp of widening in hyperscalers over 6 weeks 💻📉 But ZERO contagion to the broader market: Senior Non-Fin is just +2bp off its post-Iran War tights at 83bp. €27bn of hyperscaler paper expected Sep-Nov — more than the entire rest of YTD. Read more in my full Equity vs Credit 👇

European high yield primary last week: €0. Not €0.5bn. Not "quiet." ZERO deals 🦗 Investment grade: €1bn. One single deal... Flows into IG funds on the other side were largely positive 📈 And ~€27bn of hyperscaler supply is queued for September–November 🌊

July was the worst month ON RECORD for tech momentum. US -39%. Europe -23% 😱 Kospi -39% since June. Nasdaq briefly in a bear market. European investment grade closed the month… 1bp TIGHTER 💪 Rotation, not retreat. What is credit seeing that equities aren't? 🧐

Everyone quotes "89bp, near the 2021 tights, technicals, blabla..." So people dont focus on the index changed underneath 👀 - BBB share: 53.4% ➡️ 45.9% - Single-A share: 37.9% ➡️ 44.7% - Duration: 5.4y ➡️ 4.6y You're not paid less for the same risk. You're taking LESS risk for less spread 📉

For the FIRST time in its history, the European IG market will pay out €100 BILLION in coupons over the next 12 months 💶 In April 2022 that number was €40bn only 😉 That's a price-insensitive bid that grows every time yields rise. The market is quietly building its own buyer 🏗️

Hyperscalers issued only 11.4% in EUR ❗ It's WAY below the 20% JPM expected (AT&T and Verizon both run ~18% in euros) 📊 The surprise? Smaller currencies are doing the heavy lifting: 6.8% CAD, 3.1% CHF, 1.5% JPY. Is the euro losing its data center funding appeal? 👇

€37bn out of €3.2tn... Is it a lot? 🤖Hyperscalers are only 1.2% of EUR IG today BUT @jpmorgan sees that hitting 7.9% by 2030 if the AI capex cycle keeps running 💸 What does it mean? 🕵️ That would put AMZN, GOOGL, META, MSFT each at ~1.5% of the benchmark… -> BIGGER than VW (the largest at 1.2%) 😱

A war. An oil shock. An ECB back to hiking. ⚔️🛢️ And High Yield is ONLY +10bp wider on the year. 🔥 Under that calm index, the market is quietly splitting in two — BBs glued to the tights, single-Bs and CCCs decompressing back to 2022 levels. I broke down where I'd actually put my money 👇

Credit spread now makes up just 16% of all-in IG yields — the lowest since July 2007. 📉 You're no longer paid to take credit risk. You're paid to take duration. The entire bull case rests on one assumption: yields keep doing the work. Strip out the govie bid and there's almost no cushion left

The most counterintuitive trade of 2026: war was BULLISH for chemical credit. 🧪 A blocked Strait of Hormuz choked China's exports — and broke the 'dumping' story that had crushed the sector for years. EUR HY chemicals: +150bp tighter. Best first half since the financial crisis.

The index says 'all clear.' Underneath it, the single-B vs double-B gap just blew back out to its 2022 crisis levels. Headline spreads are pinned at the tights. The rating ladder is quietly cracking. 🪜 That's textbook late-cycle: the average looks calm while the tails pull apart.

US margin debt is up 54% year-on-year — one of the biggest jumps in history. 📈 Equity investors are levering up at the exact moment credit prices in basically zero risk. Both markets can't be 'cheap.' One is borrowing against the other's complacency. Leverage like this rarely unwinds politely. ⚠️

7% of the European leveraged loan index now trades below 80 cents. 🔴 It's not oil. It's not rates. It's software — the sector private credit quietly loaded up on while everyone stared at spreads. Public bonds look pristine. The AI-disruption bill is landing in loans first.

Russia invaded Ukraine → EUR IG spreads blew out +130bp. The US went to war with Iran → +25bp. 🛢️ Same asset class. Same energy shock. One-fifth the damage. Credit stopped trading on spreads — it now trades on yield. The whole regime holds on one condition: rates vol stays asleep. 😴

$760bn. 💸 That's Big Tech's AI capex bill this year — up 83% in twelve months. The same names are now selling 100-year bonds in an industry where products die in five. Equity prices a bubble. Credit prices a fortress. Both can't be right. So who's wrong here, stocks or bonds? 🤔

⚽ Citi's latest rates volatility hedge: the FIFA World Cup 😂 No seriously — the bank just reiterated its short vol trade because traders will be too busy watching football to move markets 😅 (and some people still believe "Markets are efficient"...)

📉 Real ECB rates at -1% after next week's hike = the SWEET SPOT for credit 30% of developed economies have negative real rates right now. Not a bug, it's a feature 💡 Too negative = ECB behind curve (bad) Too positive = financial conditions too tight (bad) -1% = Goldilocks for spreads Do you agree?

⚡ ECB hikes 25bp next week — first hike in 3 years History says don't panic. Looking at 5 prior first ECB hikes since '99: ✅ Single-Bs rally 21bp average ✅ Autos -13bp ✅ Tech -5bp ✅ BBBs -1bp 🔴 Banks, telecoms, BBs leak wider First hike = fuel for compression trade. You positioned for this?

JPM says money is still entering Credit funds! 📈 Weekend 03 June flow check-in: - 💶 Euro IG funds took in €624mm (+0.2% of AUM). - 💷 Sterling IG funds were basically flat: +£12mm (~0% of AUM). - 📈 European HY funds drew €296mm (+0.3% of AUM). - 🧠 European strategic funds inched up €66mm

📉 Credit spreads are just 16% of global IG corp bond yields. lowest reading since 07 😱 Other 84%? govies. Record supply. Record ECB QT. Inflation picking up, PMI going down. And secondary refuses to move 😅 My full weekly breakdown 👇 open.substack.com/pub/zegoodt...

🔍 The chart European credit investors should be staring at. PMI input prices are rising faster than output prices — the textbook signal for margin compression. And in this cycle it's worse for European corporates than US ones. Faster than 2022/2023. Bigger gap than ever 📉 → Own pricing power

🎢 14 central banks have hiked rates since the US-Iran conflict started. 13 have cut. The era of synchronous global easing is officially over. South Africa was the latest to flip hawkish 🦇 Yet Euro IG spreads: -6bp. Real ECB policy rates still below -1% after the next 25bp hike. That's the catch.

⚡ 23 months. That's how long it took Euro IG to retrace its widening after Russia-Ukraine in 2022. Three months into US-Iran? Euro IG: -6bp. AT1: -17bp. Single-Bs: -18bp. Not all wars are equal. Not all rates shocks are equal 🔄 The difference this time? Steeper curves → retail bid → spread bid.

EUR IG saw +€61bn of net rating upgrades in April. Strongest month since November. But underneath the headline, a clear split: • Banks: +3.9% net upgrade rate • Consumer Goods: +6.8% • Autos: -4.9% • Chemicals: -4.3% The credit cycle isn't synchronised anymore. Which side are you positioned on?

EUR IG spreads close to the tights... The ratio of those spreads to rates volatility? 2nd percentile of history. Credit is priced for perfection while US core PPI just hit its highest level since 2022. This week's roundup — what I see, and where I'd still buy 👇 zegoodtrader.substack.com

💥 European HY just pulled €1bn of inflows in ONE WEEK That's 1% of total AUM. Week ending 13 May: 🟢 EUR HY: €1.02bn inflow 🟢 EUR IG: €711mm inflow 🟢 GBP IG: £16mm inflow HY ETFs alone absorbed €202mm. Risk appetite is back in a BIG way. Is this the start of a sustained HY rally?

🚀 European credit funds saw €1.9bn of net inflows last week The breakdown (week ending 13 May): 🔵 EUR IG: €711mm 🔵 EUR HY: €1.02bn (!!) 🔵 Strategic: €236mm 🔴 GBP IG: flat at £16mm HY leading the charge at 1% of AUM in a single week. That's the strongest weekly flow since early 2024.

🚨 Private credit's reputational crisis is playing out in PUBLIC 📉 KKR, BlackRock, Apollo's publicly traded BDCs are IMPLODING — trading at near 50% discounts to NAV despite being tiny slivers of their parent firms' AUM

💥 Credit primary market SMASHED expectations yesterday — €49.3bn weekly volume vs €30-40bn consensus The breakdown: 🟢 SSAs: €28bn — busiest week in a MONTH 🟢 Corporates: €11.5bn (Rolls-Royce returned for first deal since 2020) 🟢 Financials: €10bn