Calling the end of the current credit cycle is becoming an increasingly popular sport among seasoned market-watchers. While there is division over exactly when it will conclude, the consensus is it will be soon.
Last week, Deutsche Bank analysts concluded that they were "not quite ready to call the end of the spread cycle yet" – but added that 2017 looked more likely to see the turn towards recession again.
A typical credit cycle moves in three phases: Recession; recovery and expansion. Global markets have been in the third phase since 2012. With many banks in particular still restructuring their balance sheets from the last credit crisis, extending the expansion would be in many lenders' interest.