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Daily Archives: 20th September 2018

20th September 2018

The future is bright for credit

MARKET CLOSE:
iTraxx Main

67.9bp

iTraxx X-Over

266bp

🇩🇪 10 Yr Bund

0.48%, -1bp

iBoxx Corp IG

B+129.8bp, -0.5bp

iBoxx Corp HY

B+379.2bp, -0.8bp

🇺🇸 10 Yr US T-Bond

3.07%, -1bp

🇬🇧 FTSE 100

6026.94, ERROR
🇩🇪 DAX

12591.68, ERROR
🇺🇸 S&P 500

3349.16, -4.38

Scene set for a squeeze in spreads…

Could it be that credit spreads are set for a squeeze tighter through the remaining months of this year? One of the features of the supply seen this month is that books have been oversubscribed by a considerable margin, and deals have been able to be priced tighter by more than the average seen previously this year. The clamour for non-financial IG corporate risk from investors has come about because there hasn’t been the usual level of issuance – we’re well below the average levels seen in the past five years. But also, investor cash balances are at extremely high levels and need a home – quickly.

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