Insight

Monthly European Loan Market Update - July 2020

Monthly US Loan Market Update - June 2020
Monthly insights and updates from the Invesco Fixed Income team.

The Credit Suisse Western European Leveraged Loan Index (“CS WELLI” or “Index”) returned 1.57% in June, comprised of principal return of 1.21% and interest return of 0.36%.1  

Economic data released during the month largely surprised to the upside. For example, European flash PMIs bounced from recent lows, US employment increased for the second consecutive month, and US consumer spending returned to 94% of the pre-virus level. Reopening of economies is progressing, albeit at various rates across the globe. On regained optimism, European and US equity markets increased by approximately 5% and 1%, respectively.2  

This positive sentiment fed into the loan market. The CS WELLI advanced by 1.15 points in June to an average price of €92.74,1 as the month closed out one of the strongest quarters on record. The European leveraged loan market rallied by 9.11 points during the course of Q2, which reversed the majority of the 13.7-point drop witnessed in March.1 

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^1 Credit Suisse Western European Leveraged Loan Index (CS WELLI) in EUR as of June 30, 2020. Past performance is not a guide to future returns. 
^2 S&P 500 Index (in USD) and STOXX Europe 600 Index (in EUR) as of June 30, 2020. The S&P 500 is widely regarded as the best single gauge of large-cap U.S. equities. The index includes 500 leading companies and covers approximately 80% of available market capitalization. The STOXX Europe 600 Index is derived from the STOXX Europe Total Market Index (TMI) and is a subset of the STOXX Global 1800 Index. With a fixed number of 600 components, the STOXX Europe 600 Index represents large, mid and small capitalization companies across 17 countries of the European region: Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland and the United Kingdom.