Fitch's 'Inside Credit': European High Yield and the ECB's QE Program

The latest edition of Fitch Ratings' Inside Credit newsletter features a European high yield and leveraged finance market overview, including the impact of the ECB's QE program.

ECB asset purchases are likely to intensify the search for yield amid an ongoing scarcity of assets, as savings continue to exceed demand for investment in continental Europe, according to Fitch. ECB asset purchases may also help anchor current benchmark rates while improving headline GDP and credit spread performance. However, rising trade and capital imbalances in Europe may reveal fragilities reminiscent of 2007, when excessive credit growth in unproductive fixed assets and consumption in the deficit economies led to a severe reversal.