European and US Credit: Weekly Chartpack An overview of credit markets

Research evidence excerpt

European and US Credit: Weekly Chartpack An overview of credit markets

26 May 2026

European and US Credit: FixedCredit Income

Weekly Chartpack

An overview of credit markets

◆ Even as equity markets continued to rally last week, the Tom Russell, CFA

picture was more nuanced in credit spreads Credit Strategist HSBC Bank plc

thomas.russell@hsbc.com

◆ Higher government bond yields are starting to weigh on fund +44 20 3359 5666

flows… Song Jin Lee, CFA

European & US Credit Strategist

HSBC Bank plc

◆ …but have yet to dent corporates’ appetite to borrow, songjin.lee@hsbc.com

particularly in the US +44 20 7991 5259

Dominic Kini

Green Bond & Credit Strategist

Even with a volatile start to the week, AI optimism provided a tailwind to risk appetite HSBC Bank plc dominic.kini@hsbcib.com

with stronger than expected results from NVIDIA (Bloomberg, 21 May), and equity +44 20 7991 5599

markets continued to rally. There was modest spread compression in USD credit,

reaching the tightest levels in the last three months across both IG and HY, but

European spreads leaked slightly wider in cash (p1). CDS index spreads continue to

grind tighter, moving closer towards the bottom of their 40-d Bollinger bands.

This softness in EUR credit was broad based and followed a classic risk-off pattern,

as HY decompressed relative to IG and subordinated paper lagged, even as Auto

spreads held in well (p5). USD markets had started the week on the back foot before

rallying strongly through Friday, with Autos & Technology outperforming in IG, and

HY spreads tightened (p13).

As higher government bond yields weighed on ytd total returns, mutual fund flows saw

outflows across DM credit last week, with a particular uptick in pace among IG funds

(p29).