Wide Spreads May Block Future Rate Hikes (Capital Markets Research)

WEEKLY MARKET OUTLOOKDECEMBER 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.Wide Spreads May Block Future Rate HikesCredit Markets Review and Outlook by John Lonski Wide Spreads May Block Future Rate Hikes. ¯ FULL STORY PAGE 2Topic of the Week by Ben Garber US 2016 Fixed Income Outlook: Credit Risk Strikes Back. ¯ FULL STORY PAGE 5The Week Ahead We preview economic reports and forecasts from the US, UK/Europe, and Asia/Pacific regions. ¯ FULL STORY PAGE 10 The Long View Check our chart here for forecast summaries of key credit market metrics. Full updated stories, Thus far, US Treasury bond yields have edged lower following the Feds first rate hike in nearly 10 years, begin on page 22.¯ FULL STORY PAGE 22Ratings Round-Up by Njundu Sanneh Downgrades and Defaults on the Rise.¯ FULL STORY PAGE 25Market Data Credit spreads, CDS movers, issuance.¯ FULL STORY PAGE 27Moodys Capital Markets Research recent publications Links to commentaries on: CHK, corp cred, COP, Slovakia, Hess, BBT, banks, PEMEX, UNH, sov risk, NAB, profits, ICICI, TLAC, Nike. ¯ FULL STORY PAGE 31Credit SpreadsInvestment Grade: Year-end 2016 spread to be a close to its recent 162 bp. High Yield: Recent spread of 714 bp may approximate 650 bp by year-end 2016.Defaults US HY default rate: November 2015, 3.0%; Moodys Credit Policy Group forecasts 4.1% by November 2016.Issuance For 2016, US$ IG bond offerings may edge up by 0.3% to $1.345 trillion, while US$ HY bond issuance may drop by -7.8% to $328 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: Katrina Ell +61 (2) 9270-8144 Katrina.ell@moodys.comEditor Dana Gordon 1.212.553.0398 dana.gordon@moodys.comEditors note: The Weekly Market Outlook will not be published over the next two weeks, owing to the Christmas and New Year holidays. Our n...