WEEKLY MARKET OUTLOOK APRIL 13, 2017 CAPITAL MARKETS RESEARCH Moodys Analytics markets and distributes all Moodys Capital Markets Research, Inc. materials. Moodys Capital Markets Research, Inc is a subsidiary of Moodys Corporation. Moodys Analytics does not provide investment advisory services or products. For further detail, please see the last page. Credit Cycle Enjoys a Respite Credit Markets Review and Outlook by John Lonski Credit Cycle Enjoys a Respite. ¯ FULL STORY PAGE 2 The Week Ahead We preview economic reports and forecasts from the US, UK/Europe, and Asia/Pacific regions. ¯ FULL STORY PAGE 5 The Long View Check our chart here for forecast summaries of key credit market metrics. Full updated stories, A recent climb by the VIX index to its most risk averse reading since Election Day will help to slow bond issuance from Q1-2017s torrid pace, begin on page 13. ¯ FULL STORY PAGE 13 Ratings Round-Up by Njundu Sanneh Upgrade Ratio Still Positive. ¯ FULL STORY PAGE 17 Market Data Credit spreads, CDS movers, issuance. ¯ FULL STORY PAGE 19 Moodys Capital Markets Research recent publications Links to commentaries on: South Africa, yields, Venezuela, equity, eurozone, hike, global, profits, Korea, Caa, yes, hike, VIX, rates, France, demography, boom, Japan, reform, India. ¯ FULL STORY PAGE 23 Credit Spreads Investment Grade: Year-end 2017 spread to exceed its recent 126 bp. High Yield: After recent spread of 412 bp, it may approximate 480 bp by year-end 2017. Defaults US HY default rate: after March 2017s 4.7%, Moodys Credit Policy Group forecasts it near 2.9% during 2018s first quarter. Issuance In 2016, US$-IG bond issuance grew by 5.6% to a record $1.412 trillion, while US$-priced high-yield bond issuance fell by -3.5% to $341 billion. For 2017, US$-IG bond issuance may rise by 4.8% to a new zenith of $1.468 trillion, while US$-priced high-yield bond issuance may increase by 16.9% to $398 billion but still lag 2014s $435 billion zenith. Click here for Moodys Credit Outlook, our sister publication containing Moodys rating agency analysis of recent news events, summaries of recent rating changes, and summaries of recent research. Moodys Capital Markets Research, Inc. Weekly Market Outlook Contributors: David W. Munves, CFA 1.212.553.2844 david.munves@moodys.com John Lonski 1.212.553.7144 john.lonski@moodys.com Ben Garber 1.212.553.4732 benjamin.garber@moodys.com Njundu Sanneh 1.212.553.4036 njundu.sanneh@moodys.com Yukyung Choi 1.212.553.0906 yukyung.choi@moodys.com Irina Baron 1.212.553.4307 irina.baron@moodys.com Franklin Kim 1.212.553.4419 franklin.kim@moodys.com Xian (Peter) Li 1.212.553.1404 xian.li@moodys.com Moody's Analytics/Europe: Tomas Holinka +420 ( 221) 666-384 Tomas.holinka@moodys.com Moody's Analytics/Asia-Pacific: Katrina Ell +6...