Monthly Credit ViewMonthly Themes & House View

中文标题

月度信贷观点 · 月度主题与行内观点

OCBC Research09/04/2026updated 10/17/2026

Multiple economies

Citable research brief

Core conclusion · Tlines extraction

For August 2026, OCBC Research observes that Asian and US high-yield (HY) credit outperformed investment-grade (IG), driven by resilient fundamentals, low defaults, and spread compression. Record US IG issuance and elevated volatility at the long end of the Treasury curve pressured IG spreads, while higher-for-longer rates and hawkish Fed rhetoric weighed on duration. Within SGD credit, returns were negative but selective segments such as perpetuals and bank capital offered carry. The house view remains defensively positioned, favoring quality carry in short-dated bonds, BB-rated DM HY, and SGD crossover credits.

Institution: OCBC Research
Published: 09/04/2026
Research topic: credit strategy · Asia credit high yield · US investment grade
Time horizon: 6-12 months · 3-6 months · 1-3 months · 12 months · 6 months

Key arguments

Asia HY spreads tightened 26bps to 316bps in August, supported by resilient US macro and low default expectations.
US IG spreads were broadly flat as record supply and duration sensitivity limited compression.
SGD credit market saw negative total returns, but perpetuals and short tenors outperformed.
Record US IG issuance of ~USD177bn in August was driven by hyperscaler, M&A, and pre-election funding.
OCBC advocates a defensive bias, favoring short-dated bonds and quality carry.

Key numbers

Asia HY spread change (Aug): -26bps to 316bps
US HY spread change (Aug): -19bps to 260bps
August 2026 US IG issuance: USD177bn
SGD credit market total return (Aug): -0.17%
SGD issuance in August: SGD5.6bn
US 30Y Treasury yield high (18 Aug): 5.33%

Main risks

Higher-for-longer interest rates could pressure credit spreads and valuations.
Potential Fed rate hikes could increase duration risk and volatility.
Geopolitical tensions in the Middle East may impact market sentiment.
Record supply in US IG could lead to spread widening if demand falters.
SGD credit market may continue to see negative total returns if rates rise further.

Corresponding source evidence

Asia HY recorded zero defaults over the past 12 months, and default expectations remain low in the near term. · 6-12 months
IG spreads were broadly flat m/m, reflecting increased AI-related technology issuance, already-tight valuations, and higher sensitivity to duration risk, which leave little margin for error to absorb potential macroeconomic shocks. · 3-6 months
USD102bn of reinvestment demand is expected to offset much of this year's new supply, resulting in lower net issuance. · 1-3 months

Conditions / invalidation

If elevated supply and rate volatility persist
Assuming occupancy and rental income remain sustainable

Context: the conclusion is Tlines' automated extraction, not the institution's wording. Quoted evidence is publisher wording. Scope and date must travel with the conclusion.