...Quarterly Market Monitor and Forecast Summary Possible Rating Trend Turnaround: The negative corporate rating migration trend of 2013 has slowed in 1Q14 with the consolidation of the nascent European recovery. Bond rating changes have broadly displayed a net negative bias since 2007, but this narrowed meaningfully from mid-2013 onwards, and has continued to get less negative in 1Q14 - with bond downgrade volumes falling by 44% qoq. Robust Issuance: European corporate issuance remains robust, continuing the trend observed since 2012. Issuance increased 5% yoy in 1Q14 and remains on track to eclipse 2013's highs as issuers continue to take advantage of low funding costs and healthy market liquidity. Favourable Fund Flows: Riskier emerging markets drove a turnaround in European corporate fund flows in 1Q14 as investors increasingly looked to safer havens. Investment- grade flows turned positive for the first time since end-2012. We expect this flight to quality to persist in 2014. What to...
