Corporate credit may be squeezed as the ripples from Europe's debt woes and dented US investor confidence are felt in New Zealand.
Global markets sank into the red on Friday on fears that some European nations may default on their debts, while higher jobless numbers in the US also knocked investor confidence.
The head of fixed interest at AMP Capital Investors, Grant Hassell, says that both those factors, coupled with events closer to home, may make corporate borrowing more expensive.
He says the decision by the Reserve Bank of Australia not to raise Australia's official cash rate earlier in the week could have an impact, as could New Zealand's higher-than-expected unemployment rate.
Meanwhile, the managing director of Brook Asset Management, Mark Brighouse, says concerns about the debt problems of some countries in the Eurozone serve as a warning to those who believe that a single currency equals economic prosperity.
He says countries like Greece, Portugal and Ireland are good examples of the tensions that can arise with currency union.
A currency union, he says,is not necessarily the best way of maintaining economic prosperity, because it affects a country's ability to set interest and exchange rates.
