Schroders Credit Lens October 2026: your go-to guide to global credit markets

Credit markets offer attractive absolute yields, but tight spreads and growing issuance leave limited protection against renewed risks.

• France’s fiscal and political challenges lifted its EUR option-adjusted spread from 80 basis points on 31 August to 104 basis points on 7 October 2026, the highest among the countries shown.
• EUR investment-grade spreads widened sharply relative to US investment-grade spreads, reaching around 100 basis points versus the US market in the mid-80s by October 2026.
• Credit spreads provide little margin of safety, although the level of absolute yields continues to support investor demand.
• Spreads on AI-related high-yield issuers have risen to levels associated with credit risk weaker than single-B, while investment-grade hyperscaler spreads have also widened relative to the market.
• Large volumes of new credit issuance remain a concern, but demand has so far absorbed the supply; historically, spreads were at similar or tighter levels during much of the 1940s, 1950s and 1960s.

Takeaway: Investors can still find income in credit, but should be selective because tight overall spreads, France’s deterioration, AI-related risks and heavy issuance reduce the margin for error.