Deutsche Bank Favors US Dollar Credit Over Euro Bonds as Iran War Threatens Wider Spreads

3 articles · Updated · Bloomberg · Jun 15

Deutsche Bank shifted to an underweight stance on euro-denominated corporate credit in its global allocations, preferring US dollar bonds as the Iran war’s aftershocks hit Europe faster.
Year-end spreads on both euro investment-grade and junk bonds are expected to widen, with the bank warning that European corporate debt is especially vulnerable to the conflict’s fallout.
Steve Caprio-led strategists said AI-driven disruption still poses a risk to US credit, but judged the Iran war’s impact to be the more immediate force shaping relative performance.
The call underscores a broader geographic divergence in credit markets, with Deutsche Bank positioning for Europe to absorb more near-term stress than the US.

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Is the slow-burning AI disruption a greater long-term credit risk to the US than the immediate Iran war fallout?

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