As more investors begin to believe that the global economy is in a recession, fears of inflation are dropping, and money managers are turning their concerns from credit risk to leverage.

"The message from investors to corporates is that if we are headed for a recession, they should clean up their balance sheets and prepare a financial buffer," said Karen Olney, chief European equities strategist at Merrill Lynch. "As banks de-lever, nonfinancial corporates will have to wake up to far less flexible world of credit."

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