Insights

Global food prices are at a 10-year high, pushed up by the pandemic. With climate change a growing issue, prices are likely to stay raised. Consensus credit data shows food producers have weathered COVID well, with many rated higher than the major credit rating agencies and continuing to improve.

With a potential UK interest rate hike on the cards, a growing number of central banks are seeing inflation as a key near-term risk to economic stability. With net credit upgrades currently in balance, and a growing number of countries imposing monetary tightening, there is a risk that the global net credit balance turns sharply negative.

The hospitality industry has suffered from prolonged closures, reduced capacity, supply issues and staff shortages during COVID, damaging an already low margin business. For the UK, Brexit has magnified these effects. Analysis of consensus credit data shows a disparity in recovery between the US and UK.

A potential US Government shutdown is focusing attention on Sovereign credit risk, with a risk to US Treasury bond payments. A missed payment would be a major market event, but the broader issue is how Governments around the world handle the cost of COVID. The latest consensus data examines credit risk trends for Global Sovereign Governments, plus compares consensus vs CRA ratings for 12 major economies.

There are fears that investors in the broader high yield space are not being properly compensated for the risks. Though recent private equity investments have focused on firms that have weathered the pandemic with stable revenues and strong cash flows, which could boost the average credit quality of leveraged loan assets, the latest consensus credit data shows a more mixed picture.

Shipping container unit costs have skyrocketed and delivery times doubled in the past 18 months, with the pandemic causing port closures, trade flow disruptions and capacity reductions. Consensus credit data tracks the credit trend of Global Marine Transportation companies and suggests that the sector may be a leading indicator for broader corporate credit risk.