Macro Perspective

Western Asset’s base case outlook is for an elongated, U-shaped global economic recovery. We expect the battle against COVID-19 will take time; however, we are encouraged by signs of progress in the global race for a vaccine and the decline in global mortality rates. Forceful policy action to date has buoyed global economic activity and restored market functioning. We expect central banks to remain extraordinarily accommodative, especially in light of subdued global inflation pressures, and to remain so to support the recovery. That stated, we continue to be wary of the upcoming US presidential election, post-Brexit trade negotiations, US-China trade discussions and geopolitical tensions as these all have the potential to disrupt economic and financial market activity. Given these uncertainties, we aim to position our portfolios to withstand further market volatility, yet remain flexible enough to capture exceptional value opportunities as they appear. Here, we provide a summary of the key drivers behind our global credit outlook and details about where we see value across credit markets.

Global Corporate Credit Sector Views