HG Credit Foreign Demand Monitor

Research evidence excerpt

HG Credit Foreign Demand Monitor

J P M O R G A N North America Credit Research

06 July 2026

HG Credit Foreign Demand

Monitor

FAB index modestly higher as hedging costs come

down; divergent APAC flows with pickup in overnight

net buying but also largest outflows from TWD ETFs in

nearly a year

• FAB: Our JPM Foreign Attractiveness of USD IG Bonds (FAB) index rose North America Corporate Credit -

3.5bp WoW to 53bp. The move higher was mainly driven by hedging costs Investment Grade Strategy

declining by 2.6bp last week while yields nearly offset themselves with USD IG Nathaniel Rosenbaum, CFA AC

Corp yields up 7bp last week offset by local government yields also moving up (1-212) 834-2370

6.2bp on average. The Forward FAB vs. FAB differential remains inverted nathaniel.rosenbaum@jpmorgan.com

implying no further upside for the FAB. The implied forwards market is J.P. Morgan Securities LLC

pricing in hedging costs to rise across all regions over the next 6m; by 11bp Silvi Mantri AC

for EUR, 14bp for JPY and 16bp for TWD. (1-212) 834-7239

silvi.mantri@jpmchase.com

• EMEA: For EUR investors, the USD IG yield pickup increased by 5bp J.P. Morgan Securities LLC

WoW to +54bp, partly driven by hedging costs down 2bp to 1.50%. In fact, Matthew Bailey

the pickup across 5y, 10y and 30y for EUR investors is close to their 6m (44-20) 7134-2384

highs. Similarly, for GBP investors the yield pickup at the 10y point rose by 4bp matthew.a.bailey@jpmorgan.com

J.P. Morgan Securities plc

WoW to +54bp. USD IG Corps at the long-end continue to screen more attractive

versus EUR corporates for most currencies (see Figure 5 on page 2).

• APAC: For JPY investors, the yield give fell by 4bp WoW to -46bp despite

hedging costs also down 4bp to 2.98%. That said, the pickup in the front-end for