Carry is taking centre stage again in 2026 as credit markets navigate elevated supply, tight valuations, and the accelerating AI‑financing cycle. Across USD, EUR, Asia, as well as emerging market sovereigns, spreads may drift modestly wider – but resilient demand and strong fundamentals should keep income the dominant story.

 

Key takeaways:

  • Carry to dominate in 2026, with mild and orderly widening despite elevated supply and tight valuations.
  • AI-related issuance expected to rise but should remain absorbable in USD market, with strong demand and stable fundamentals anchoring IG and HY.
  • High supply meets durable technical support from FMFs and Dutch pensions in EUR market, keeping widening limited and carry central.
  • Asia to benefit from resilient growth and strong in-region demand, while EM to remain supported but constrained by very tight spreads.

The PERSPECTIVES Viewpoint is currently available and client-ready for the following regions: Germany, Americas, Europe, Middle East, Africa and Asia Pacific.

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