FICC Focus Credit Crunch: Investor Survey, France, Trade War and 4Q Outlook
Oct 14, 2025
Alexis Renault, Global Head of High Yield at Oddo BHF, brings his expertise in European leveraged finance to the discussion. He analyzes the results of the BI 4Q25 High Yield Investor Survey, delving into France's political gridlock and its impact on investments. Alexis expresses caution regarding Q4 returns, emphasizing risks from geopolitical tensions and earnings. He argues for a conservative portfolio approach, favoring defensive sectors like telecom and healthcare while underlining the appeal of single B ratings in today’s market.
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France Faces Serious Fiscal Strain
- France faces deep fiscal stress with debt at ~116% of GDP and rising interest costs that threaten investment and growth.
- Alexis warns companies are pausing investment and calls the situation "very, very, very bad" for France.
Wait For Reforms Before ECB Support
- Do not expect the ECB to bail out France before meaningful fiscal reforms are enacted, Alexis says.
- Avoid creating moral hazard by relying on central-bank intervention to fix sovereign fiscal problems.
Timing Uncertainty Drives Market Caution
- Q4 sentiment flipped from positive at quarter-end to more cautious after a rapid 80bp move in spreads.
- Alexis stresses timing is uncertain and outcomes depend on sovereign, tariff, geopolitical, and earnings events.