Market Overview - European equity futures are experiencing significant declines, with the EuroStoxx 50 down 0.9%, DAX falling 1.2%, and FTSE declining 1.0%, indicating a risk-off sentiment among investors [2][10] - In the United States, five-year Treasury yields have dropped to a one-year low, reflecting a flight to safety due to concerns over the stability of US regional banks and ongoing geopolitical uncertainties related to trade tensions [3][10] Company Developments - Google (Alphabet Inc.) is under scrutiny for its rapid data center expansion in India, which is reportedly exposing critical gaps in AI safeguards and raising regulatory concerns in emerging markets [4][10] - Iberdrola, the owner of Scottish Power, is exploring a deal for its UK retail energy unit, indicating strategic moves within the energy sector [5] - Venture Global, a key player in the LNG market, is addressing client suspicions regarding its LNG contracts, highlighting challenges in maintaining client trust [5] Financial Risks - The collapse of First Brands has led to significant warnings from investors about the risks associated with leveraged loans, indicating potential vulnerabilities in the private credit market [6][10] - Europe is facing adverse effects from the ongoing US-China rare earth wars, which are negatively impacting European industries and supply chains [7][10]

June 27, 2025 06:17 PM GMT US Credit Strategy: 1Q25 Fundamentals Modest Deterioration, but Interest Coverage a Bright Spot M O R G A N S T A N L E Y R E S E A R C H North America Morgan Stanley & Co. LLC Vishwas Patkar Strategist Vishwas.Patkar@morganstanley.com +1 212.761.8041 Joyce Jiang Strategist Joyce.Jiang@morganstanley.com +1 212.761.0165 Karen Chen Strategist Karen.Chen@morganstanley.com +1 212.761.1199 Christina Sigler Strategist Christina.Sigler@morganstanley.com +1 212.761.4116 Source: Bloomberg, ...