HSBC On European Credit: Night Vision Required

European corporate hybrids are set to face volatility during 1H2017, as the Australian construction materials firm Wienerberger may not call its euro-denominated 6.5% hybrid on the first call date, while RWE is likely to call its CHF-denominated hybrid on its first call date. HSBC analysts, led by Michael Ridley, said in their November research titled “Night Vision Required – European Corporate Credit Outlook 2017” that they believe Trump’s victory has enhanced the likelihood of a rising U.S. dollar. QE-masked credit market risks Ridley and colleagues argue that following the entry of the ECB and BoE as corporate bond buyers in 2016,…