UBS Braces for Onerous Touchdown in US Credit score, Favors European Debt

UBS Group AG is recommending traders to purchase European credit score over US debt amid indicators of misery within the US mortgage markets, cracks rising in non-public credit score and a probably extreme draw back threat in US high-yield debt.

“We acknowledge US excessive yield is best positioned — primarily on the shift in credit score high quality,” UBS analysts led by Matthew Mish wrote in a word on Wednesday. “Nevertheless, we nonetheless imagine credit score is heading for a tough touchdown.”

The riskiest corners of US credit score are already flashing some warning indicators for a tough touchdown, based on the analysts. An abrupt reversal in …