Deutsche Bank: Aftermath of Iran War May Impact European Credit Bond Market

```htmlGolden Ten Data reported on June 15 that Deutsche Bank strategists stated European corporate bonds are susceptible to subsequent impacts from the Iran war, and both investment-grade and junk bond spreads are expected to widen by the end of the year. The credit strategy team led by Steve Caprio currently maintains an underweight position in euro-denominated credit within global asset allocation, adopting a more cautious stance compared to dollar-denominated credit. They noted that the aftermath of the Iran war is manifesting more rapidly. “Stubborn inflation, rising shipping costs, potential storage chip shortages affecting key cyclical industries, and ongoing tariff uncertainty are all negative factors, especially in Europe. At least from now until year-end, market prospects mean greater differentiation in credit performance and wider spreads.” The strategists expect euro investment-grade bond spreads to widen nearly 20 basis points to 95 basis points by the end of this year, while junk bond spreads are expected to widen 77 basis points to 345 basis points. For dollar investment-grade bonds, they forecast spreads will moderately widen by 10 basis points to 82 basis points by year-end, and junk bond spreads are expected to widen by 39 basis points.```