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

29 June 2026

Fixed Income European and US Credit: Credit

Weekly Chartpack

An overview of credit markets

◆ Concerns around elevated AI-related valuations drove a Tom Russell, CFA

softening in risk appetite last week, and spreads widened Credit Strategist HSBC Bank plc

thomas.russell@hsbc.com

◆ The risk-off move was broad-based, and HY decompressed +44 20 3359 5666

relative to IG Song Jin Lee, CFA

European & US Credit Strategist

HSBC Bank plc

◆ Tech spreads lagged behind more in the US than Europe, songjin.lee@hsbc.com

with Autos struggling in the latter +44 20 7991 5259

Dominic Kini

Green Bond & Credit Strategist

Despite the oscillating headlines out of the Middle East, oil prices continued to fall HSBC Bank plc dominic.kini@hsbcib.com

last week, which helped drive a rally in rates and continued to support total returns in +44 20 7991 5599

credit even as the spread picture softened slightly. Market attention has once again

shifted back to the AI story, with concerns around the elevated valuations in the

equity space in particular weighing on investor sentiment last week.

Credit markets were not immune to this, with cash indices leaking slightly wider in IG

and clearly unperforming in HY (p1). In addition to this, ratings decompression within

Europe subordinated paper also led the weakness, particularly Hybrids and AT1s (p6).

This focus on AI did also drive some underperformance in Tech on both sides of the

Atlantic, although the magnitude of this weakness was higher in the US than in

Europe. In fact, in Europe Autos was the worst performing sector last week, lagging

behind even Tech (p5). We continue to favour Autos in the US rather than in Europe.