The global bond issuance have increased by 13% in the first half of 2024, with the most significant increases in structured finance and U.S. public finance. This is what emerges from the new report by S&P Global Ratings (“S&P”) on global credit conditions and global bond issuance trends, which highlights a notable difference between the first and second halves of 2024.
Global Bond Issuance
As in the first quarter, S&P believes much of the increase from March is due to the fact that the debtors hyear took advantage of the strong market demand to refinance itself and prepare for the growing uncertainties on the horizon.
As for the slowing inflation “fuels market expectations for further interest rate cuts in the second half of this year, but a faster pace of debt refinancing, a relative slowdown in mergers and acquisitions and increased market volatility will likely offset the benefits of rate cuts in the near term”
The S&P report
The combination of these factors and the overall data for the first half of the year – the report continues – “lead to the prediction of an increase in bond issues of around 9% this year, with upside potential given that geopolitical risks are often more feared than they are actually restrictive”.
Spotlight on the FED
Today, meanwhile, the spotlight is once again on Federal Reserve: no news is expected on interest rates for this meeting (July 30-31), which should be confirmed at the historical record of 5.25-5.50%, with the promise of an initial reduction of 25 points in the meeting following the summer break. And, perhaps, one or two other interventions before the end of the year.
The decision should still be rooted inand resilient growth prospects and on the gradual return of inflation, in contrast to the June view that envisaged only one rate cut in 2024. In this regard, some further indications could come from Powell.
In the meantime, The US economy grew by 2.8% in the second quarter of the year on a quarterly basis, against a 2% growth expected by analysts and compared to +1.4% in the previous quarter. The increase in real GDP mainly reflects the increase in consumer spending, private inventory investment and non-residential fixed investment. Imports are also growing, which represent a subtraction in the calculation of GDP.
