The February Monthly Credit Outlook looks at recent credit trends and highlights seen in the consensus dataset. This month, credit risk is elevated but some positive surprises may be possible.
The positive credit movement witnessed in other industries like retail and energy can also be seen in the US auto sector. Credit quality continues to improve and risk continues to decline. In addition to the overall economic picture improving, demand remains robust. The same is largely true for the UK sector.
The outlook for major energy sectors ranges from good to under-performing. The US energy sector is seeing improvement in its credit though with a small blip this month. Meanwhile, the UK has seen slight improvement, and the EU has seen slight deterioration.
The retail sector is enjoying some long-awaited good fortune. According to the latest consensus data, credit risk has improved for both the US and UK retail sectors.
The worst of the pandemic-related challenges may have passed but continued improvement for the US auto sector may be under threat unless supply chain problems ease.
The UK is seeing similar problems as credit for auto firms deteriorates, and lingering concerns about Brexit remain.
Monthly changes in credit quality outlook for the energy sector were muted this month, with the US seeing some improvement and the UK seeing some deterioration in credit. The EU energy sector is stable.
Stability is the current trend for the UK retail sector though challenges for the sector remain. US retail continues on a slow and steady path to improvement.
The article from Investors’ Chronicle cites Credit Benchmark credit risk data on Oil & Gas companies and General Retailers to highlight the disparity between credit quality and share prices.
Conditions are ripe for the US and UK auto sectors though ongoing supply chain issues may hamper the otherwise bright outlook.
The energy industry is experiencing mixed fortunes, with the US sector holding steady and the EU seeing some improvement, whereas the UK sector showed deterioration from the prior month.
Credit Benchmark brings together internal credit risk views from over 40 leading global financial institutions. The contributions are anonymized, aggregated, and published in the form of consensus ratings and aggregate analytics to provide an independent, real-world perspective of credit risk. Risk and investment professionals at banks, insurance companies, asset managers and other financial firms use the data for insights into the unrated, monitoring and alerting within their portfolios, benchmarking, assessing and analyzing trends, and fulfilling regulatory requirements and capital.
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