CDS prices are often cited as a proxy for solvency risk. New research shows some large variations between CDS prices and consensus credit risk data for GSIBs.

An effective COVID vaccine may be in sight, and some sectors could see major improvements in their credit quality after the major financial damage caused by the virus. But which sectors have held up well, and which have been heading towards serious trouble?

Global airlines face a battle for their survival, and equity indexes reflect recent volatility. However, any temporary rallying in airline stocks is at odds with the relentless decline seen in credit risk consensus data.

After six months of market volatility, credit spreads have coincided with the much slower ascent of Consensus credit risk, suggesting the latter is a calmer indication of future credit market movement.

Consensus credit data suggests that in times of crisis, the “Solvency Boundary” between investment-grade and non-investment grade credits is more fluid than during non-crisis times. The implication for bond and equity investors is that in the current environment, not all BBB issues are the same.

When equity markets turn down they will pivot towards companies with the highest credit quality. This analysis shows the relationship between equity market movements and credit risk for US corporates.

The guillotine and the rack are very different instruments. One does the job quickly: the blade comes down and the head comes off. The rack

Rising global rates, coupled with trade tensions, have contributed to the recent bout of volatility in emerging markets. Venezuela now has hyperinflation, Argentina is struggling

US equities have now had 3,453 days without a correction of 20% or more – the longest bull run in US financial history.  And since