Investment weekly 11 september 2026

Investment Weekly 11 September 202 6 For Professional Clients only. Marketing Communication.

Chart of the week – Resilient credit Global speculative -grade default rates - actual and forecast 14%

10% Trailing 12 months Forecast

2% Data: Moody's Ratings 0% Something doesn’t quite add up in bond markets. G7 government bond yields have risen sharply of late, particularly at the long end, yet corporate credit spreads have barely budged. Where has the usual credit transmission gone? US Growth → An important point about the recent rise in yields is that, so far, it’s been mainly driven by higher real yields and term premia, rather than a big shift in inflation expectations. Normally, higher risk -free rates feed into tighter financial Profits are driving US growth conditions, r aising refinancing costs for firms and, eventually, leading to more downgrades and defaults. That should – but there are risks mean wider credit spreads. Yet US investment -grade spreads remain around 80bp, and high yield spreads are also relatively tight, suggesting investors are demanding relatively little compensation for corporate credit risk. There are a few possible explanations. First, the transmission may just be taking its time . Many companies locked in cheap funding before yields rose, meaning the refinancing wall has yet to bite. Downgrades, defaults, and interest coverage will be worth watching for signs that’s changing. Second, corporate fundamentals remain in decent shape, and record profits can offset higher yields. Financially fit balance sheets help justify tight spreads, even if government finances look less comfortable . Third, is the possibility that credit spreads have become too tight as Japan ese Yen → investors increasingly look for ways to “diversify the diversifiers”, allocating out of bonds and into credits. Strong fund Wh at the latest FX flows themselves could be suppressing spreads relative to the underlying risk . developments mean For now, the question is whether tight spreads are a sign of resilience or complacency. If higher yields eventually weaken corporate fundamentals, credit could start to feel the pressure. But if the bond sell -off is mainly a repricing of sovereign term premia, credit may have less reason to follow . #bonds #volatility #vigilantes

Market Spotlight From mines to minds European Stocks → Globally, 2026 is shaping up as a bumper year for new company listings (I PO s), with high -profile US listings grabbing headlines (read our note ). But a key subplot is emerging markets’ growing role in the innovation pipeline. Exploring Europe’s AI role and its wide sector exposure China raised more IPO capital than any other region in the first quarter, with AI -related companies alone bringing in around USD22bn. Hong Kong, meanwhile, has a record pipeline of 400 + prospective listings, many tied to AI, semi s, robotics and medtech. Elsewhere, fintech unicorns are lining up in parts of Africa and Latin America. This flow of new listings is reshaping EM benchmarks. Where indices were once dominated by commodities, state -owned banks, and industrial cyclicals, innovative industries now account for close to 40% – more than double levels a decade ago . That matters because platform - and IP -led firms tend to bring different margin profiles and growth trajectories, making EM earnings potentially less hostage to commodity cycles and external demand. Read our latest vi ews: Yet valuations haven’t fully caught up: EM still trades at an above -average discount to the US on common metrics. Investment Monthly : And while any re -rating won’t be immediate, selective exposure to higher -quality EM innovators could make longer - September 2026 term sense. Read more in our latest Equity Insights . #emergingmarkets #IPOs

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