Credit's rout is so severe that double-digit losses are the norm

Bonds denominated in the world’s leading currencies are suffering double-digit losses following the European Central Bank’s decision to end quantitative easing.

Investors have now lost 10.1 per cent this year on euro high-grade corporate bonds, Bloomberg debt indexes show. The more rate-sensitive US dollar and sterling credit markets have already been nursing double-digit negative returns in 2022.
 

To put the euro credit decline in perspective, its year-to-date drop eclipses all previous routs. After the Covid pandemic hit Europe in 2020, the Bloomberg Euro Aggregate Corporate Total Return index showed losses of as much as 7.3 per cent, while negative