US ratings agency Fitch out with its mid-year sovereign assessment 12 July
- global sovereign credit cycle reached an inflection point at the end of last year and has turned less negative in 2017
- global sovereign credit cycle reached an inflection point at the end of last year and has turned less negative in 2017
- unlike the 2013 "taper tantrum", there has been no sign of disruption to emerging market capital flows associated with the Federal Reserve tightening, and Fitch does not expect any such disruption in the immediate term
- higher-than-usual policy uncertainty remains in developed markets. It is still unclear whether Europe's political setting can deliver the much-needed structural reforms to support growth
- despite clear upward global growth momentum, most sovereigns are forecast to see deteriorations in their primary fiscal balances (balances excluding interest rates) in 2017 following four consecutive years of general improvements.
- this is attributed largely to waning political support for additional fiscal tightening in developed markets, and policymakers in a number of emerging market sovereigns still struggling to cope with the downward adjustment in commodity prices
Words of justifiable caution.
Full report here
