European Morning Credit: Today in European Credit

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European Morning Credit: Today in European Credit

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European Morning Credit

Today in European Credit

Strategy 16 July 2026

Taking Position: As the macro cycle in Europe has slowed over the past few months, Credit

the risk of entering the "recession" phase has increased. Downside risks to compression Europe

trades are becoming more apparent in the near term, particularly if oil prices continue to European Credit Rsch Grp

rise. We favour positioning from the short side on XO vs. Main, taking a more defensive BofASE (France)

stance going forward on compression trades. See: Hedging macro headwinds (IA) See Team Page for List of Analysts

Financials

European Banks: Another period of regulatory flux ahead. We highlight the agenda.

TLAC MREL to better align. Bail-in plug means some decompression ahead? Investor Exhibit 1: Just published

positioning remains subdued, but we still see attractive opportunities. OW Lloyds Holdco Recent publications from European Credit

'36s, Santan SNP '36s. See: 2H Outlook: regulation risk returns. (RT) Research

Nordea (NDAFH): Good 2Q26, €1.2bn net income was broadly in line with VisibleAlpha Taking Position

consensus. >15% RoE 2030 target maintained. Pre-impairment profit +6% yoy, largely Hedging macro headwinds

Ioannis Angelakis

on better fees with all-time high AUMs. Cost/income ratio improved alongside results.

Flat CET1 ratio, 2ppts buffer ahead of requirements, 1.5ppts buffer target maintained. Money In The Bank

Asset quality strong (0.7% NPL ratio). See: Decent 2Q26, >15% RoE target maintained 2H Outlook: regulation risk returns

(KL) Richard Thomas

Chemicals Nordea Decent 2Q26, >15% RoE target maintained

BASF (BASGR): BASF prelim 2Q26 results were significantly ahead of consensus. (WD) Katharine Lennon