European Credit Weekly: They think it‘s all over!

Research evidence excerpt

European Credit Weekly: They think it‘s all over!

J P M O R G A N Europe Credit Research

03 July 2026

European Credit Weekly

They think it’s all over!

• This week we published our monthly ratings trackers for IG (here) and Europe Corporate Credit - Strategy

AC HY (here), and our quarterly reviews for IG (here) and HY (here). Daniel Lamy

• Diminishing tail risks mean it’s back to the base case. However, credit (44-20)daniel.lamy@jpmorgan.com7134-0467

spreads and oil prices are already close to their pre-war levels.

Samuel Hayani AC

• The bigger debate appears to be about the path of inflation and interest (44 20) 3493-4001

rates, making duration a more substantial driver of portfolio returns than samuel.hayani@jpmorgan.com

credit spreads over H2. Matthew Bailey AC

• European Chemicals was a notable beneficiary of supply-chain disruption (44-20)matthew.a.bailey@jpmorgan.com7134-2384

stemming from the Middle East. This sector has clung onto much of its Q2 J.P. Morgan Securities plc

gains, and we see downside if pricing pressure resumes - we downgrade

HY Chemicals to Underweight

The recently signed MoU between the US and Iran has created a temporary glut of

oil supply, as tankers that had been stranded in the Persian Gulf have raced to transit

the Strait of Hormuz. This in turn has pushed down spot Brent prices into the low-

$70/bbl area, close to pre-war levels. While there are still risks that talks between

the two sides fail — there already appears to be conflict over Iran’s ambition to

charge fees for passage through the Strait — the tail risk that oil inventories become

depleted, leading to another spike in prices, are diminishing in our view.

With drags from energy prices fading, our economists also expect the growth