Credit Outlook: Sector Updates and Top Bond Picks
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The recent ruling by the German Constitutional Court, which effectively allows the European Stability Mechanism to operate, removes a great deal of near-term risk for global banks and large U.S. banks with European exposure. In simple terms, by allowing the ESM, the German court has removed the short-term possibility of a eurozone break-up created by the inability of peripheral eurozone countries to fund their sovereign debt at reasonable levels. Although there are a still lot more issues to be addressed by the European Union and the European Central Bank in regard to peripheral sovereign debt funding, there a very few hurdles that need to be cleared in the near term.
David Sekera does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.