...Emerging Markets' Outlooks Cause Drag: Rating outlooks are improving in most sectors in developed market regions but worsening in emerging markets (EMs), where they have fallen for the last five years and are now more negative than for their developed market equivalents in core sectors. History shows a correlation between a strengthening US dollar and weakening EM sovereign credit worthiness as falling US dollar incomes can affect credit fundamentals. Sector Outlooks Negative Bias: Fitch Ratings' sector outlooks, which capture the operating environment and the underlying fundamental trend of asset prices, have a more negative bias than our rating outlooks. In total 27% of sectors have a negative outlook, up from 14% at the start of 2015. Sectors under pressure include energy and commodities, retail, and banking systems in many EM countries as well as Canada (see Appendix 2). Positive sector outlooks apply to structured finance (US and Europe) although there is concern in CLOs and US CMBS....
