Credit Outlook Leaves Fed Funds Under 2% for Current Cycle (Capital Markets Research)

WEEKLY MARKET OUTLOOKSEPTEMBER 17, 2015CAPITAL MARKETS RESEARCHMoodys 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 Outlook Leaves Fed Funds Under 2% for Current Cycle Credit Markets Review and Outlook by John Lonski Credit Outlook Leaves Fed Funds Under 2% for Current Cycle.¯ FULL STORY PAGE 2Topic of the Week by Ben Garber High Risk Lending Faces Strong Currents.¯ FULL STORY PAGE 5The Week Ahead We preview economic reports and forecasts from the US, UK/Europe, and Asia/Pacific regions. ¯ FULL STORY PAGE 8 The Long View Check our chart here for forecast summaries of key credit market metrics. Full updated stories, Barring a pronounced and lasting rejuvenation of profits, a likely rise by the high-yield default rate suggests high-yield bond offerings have peaked for the cycle, begin on page 15.¯ FULL STORY PAGE 15Ratings Round-Up by Njundu Sanneh Downgrades Still Dominate in US; Balance in Europe.¯ FULL STORY PAGE 18Market Data Credit spreads, CDS movers, issuance.¯ FULL STORY PAGE 20Moodys Capital Markets Research recent publications Links to commentaries on: Merida, Toshiba, UAUA, Kroger, China, Altria, Ukraine, credit quality, BASF, FCX, Medtronic. ¯ FULL STORY PAGE 24Credit Spreads Investment Grade: Year-end 2015 spread to be under its recent 163 bp.High Yield: Recent spread of 569 bp should approximate 555 bp by year-end 2015.Defaults US HY default rate: August 2015, 2.3%; Moodys Credit Policy Group forecasts 3.4% by July 2016Issuance For 2015, US$ IG bond offerings may grow by 21% to $1.37 trillion, while US$ HY bond issuance sinks by -8% to $387 billion. In 2014, US$ IG bond issuance rose by 0.9% to $1.129 trillion, while US$ HY bond issuance dropped by -2.3% to $421 billion.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) Li1.212.553.1404 Xian.li@moodys.comMoody's Analytics/Europe: Tomas Holinka +420 ( 221) 666-384 Tomas.holinka@moodys.comMoody's Analytics/Asia-Pacific: Matthew Circosta +61 ( 2) 9270-8118 Matthew.Circosta @moodys.com Ala...