Central Banks Contain Investment Grade Spreads
The recent Covid-19 crisis triggered an economic shock, whose magnitude only compares to the Great Financial Crisis (GFC) of 2008, as depicted by our Eurozone Growth Nowcaster.
However, European investment grade (IG) credit spreads did not widen nearly as much as during the GFC or even the subsequent European debt crisis of 2011, whose peaks were nearly double of the highs seen this year. Thanks to early, massive and broad based intervention, central banks managed to keep IG credit spreads at bay.
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