JPM Daily Credit Strategy Update: If the cease-fire is no longer a Strait line, BB-BBB looks stretched; HG Spotlight published

Research evidence excerpt

JPM Daily Credit Strategy Update: If the cease-fire is no longer a Strait line, BB-BBB looks stretched; HG Spotlight published

Nathaniel Rosenbaum, CFA AC (1-212) 834-2370 Pavan D Talreja, CFA (1-212) 834-2051 North America Credit Research J P M O R G A Nnathaniel.rosenbaum@jpmorgan.com pavan.talreja@jpmchase.com

J.P. Morgan Securities LLC J.P. Morgan Securities LLC 09 July 2026

Silvi Mantri (1-212) 834-7239

silvi.mantri@jpmchase.com

J.P. Morgan Securities LLC

JPM Daily Credit Strategy Update

If the cease-fire is no longer a Strait line, BB-BBB looks stretched; HG Spotlight published

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Geopolitical risks are back in focus, with the US-Iran conflict flaring up again and thus oil prices sharply higher, with WTI

trading near $73/bbl which is up ~7% over the past three days. In terms of potential impacts, we’d argue HG is likely to once

again be relatively insulated relative to HY, with HG yields up 11bp over the past 2 days alone to 5.62% (highest since May 19th).

Since the ceasefire was announced 3 months ago, overall HG spreads have tightened 5bp to 88bp while HY spreads have

tightened 35bp to 303bp. Looking specifically at BB versus BBB, BBs have outperformed BBBs by 11bp based on a 3m

regression and the duration-adjusted BB-BBB spread differential is at just 108bp, the tightest level since early February 2025.

Figure 1: BBB-BB at tightest since February 2025

200 bp BB - BBB Duration adjusted spread difference

Jan-25 Apr-25 Jul-25 Oct-25 Jan-26 Apr-26 Jul-26

Source: J.P. Morgan.