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The March Monthly Credit Outlook looks at recent credit trends and highlights seen in the consensus dataset. This month, stubborn inflation risks steeper global credit deterioration.

Global Corporates have returned to a negative credit balance, ending their 19-month positive run. Global Financials have now had four months without a positive credit balance. This negative shift is being driven by a number of Global Sectors.

3G has been a major legacy network overhead and consumer of spectrum bandwidth in the US. But as 5G moves into high gear the Big 3 wireless carriers needed to reallocate capacity to fully support the 5G network, and free up resource for the development of 6G and beyond. With the 3G burden removed, the sector’s Big 3 are better placed to invest in future technologies with less strain on balance sheets.

Both US Consumer Services and Goods are currently hovering around neutral CCI scores. But the Black Friday stats so far suggest a good December, at least for consumer goods; if that momentum can be maintained we could see more positive CCIs across the Consumer sector.

With more teams playing than ever before (and a further expansion planned for 2026) the World Cup might provide some real surprises. But for a quadrennial contest that has been around for over 90 years, the list of winners is a bit repetitive. This insight compares average Sovereign Credit Consensus Rating for each of the defined Winners, Determined and Unqualified groups.

COP27 needs to answer one question: is a declining standard of living the price of a sustainable future? Countries with weaker credit ratings will typically see more impact of climate change – with some exceptions. This report compares Sovereign credit against climate impact risk.

Global property is at a crossroads. The build-to-rent sector is strengthening as urban rents spike across the world, but rising mortgage rates are hitting starter and family home markets. In the corporate world, North American Real Estate Investment Trusts (REITs) have improved since early 2021, but Industrial & Office REITs are showing signs of turning down as hybrid working persists.

The COVID outbreak led to widespread and rapid credit deterioration across multiple sectors; the subsequent recovery has been slower but has reversed much of the decline as economies have re-opened. But with war, supply shocks, inflation and rising rates, the improvement across multiple sectors has stalled and a growing number of them are turning down again.

Many credit portfolio managers expect default rates – currently around 2% – to be sharply higher in 2023, but the scale of the increase is still a major unknown. A useful metric to anticipate rising defaults is credit volatility – if this trends higher, credit category transition rates will increase, including transitions into default.