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Monthly Archives: September 2018

4th September 2018

Needing to ramp it up

MARKET CLOSE:
iTraxx Main

67.9bp, -0.4bp

iTraxx X-Over

296.9bp, -1.8bp

🇩🇪 10 Yr Bund

0.36%, +2bp

iBoxx Corp IG

B+138.3bp, +0.5bp

iBoxx Corp HY

B+403bp, -0.5bp

🇺🇸 10 Yr US T-Bond

2.90%, +5bp

🇬🇧 FTSE 100

6185.62, -108.90
🇩🇪 DAX

12901.34, ERROR
🇺🇸 S&P 500

3372.85, ERROR

Willing the markets on…

Our obsession with the primary market continues – because it is the oxygen of the market. Tuesday’s session saw a plethora of activity, but it was mainly financials driven. Covered bonds, senior issues and subordinated debt dominated the screens with a couple of peripheral non-financial corporates also in the mix. Spreads are edging wider, though, leaving benchmark performance to come under constant pressure, while total returns hover around zero for the year – but credit is outperforming in both IG and high yield versus equities and government bonds.

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3rd September 2018

Raring to go

MARKET CLOSE:
iTraxx Main

68.3bp, -0.1bp

iTraxx X-Over

298.7bp, -0.1bp

🇩🇪 10 Yr Bund

0.33%, unchanged

iBoxx Corp IG

B+137.8bp, +2bp

iBoxx Corp HY

B+404.6bp, +5.75bp

🇺🇸 10 Yr US T-Bond

2.86%, unchanged

🇬🇧 FTSE 100

6185.62, -108.90
🇩🇪 DAX

12901.34, ERROR
🇺🇸 S&P 500

3372.85, ERROR

All we need is confidence…

It was the dull session that we might have expected it to have been given that the US markets were closed for Labour Day. Trump was at it again, though – doing his best in stoking trade tensions.  Chinese manufacturing activity slipped to a 14-month low in August on slowing exports, sterling was weaker on the May/Barnier tough talk, while UK manufacturing grew at the slowest rate also for 2 years in August. At the end of last week we had Casino downgraded by S&P to BB (from BB+) and spreads widening hard, with the market not holding back (in cash the 2026s wider by 100bp and 5-year CDS wider by almost 130bp to 630bp) given the retailer’s over-leveraged and complex holding and debt structures – although prices didn’t move much on Monday.

On a more refreshing note, brewer Heineken was doing its best to keep primary active with a dual-tranche primary offering.

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2nd September 2018

Isolationist, but US out in front

MARKET CLOSE:
iTraxx Main

68.4bp, +1.2bp

iTraxx X-Over

298.8bp, +5.1bp

🇩🇪 10 Yr Bund

0.33%, -2bp

iBoxx Corp IG

B+135.8bp, +1.3bp

iBoxx Corp HY

B+390bp

🇺🇸 10 Yr US T-Bond

2.86%, unchanged

🇬🇧 FTSE 100

6185.62, -108.90
🇩🇪 DAX

12901.34, ERROR
🇺🇸 S&P 500

3372.85, ERROR

Trump rallies the US equity markets…

We head into the new month having been met with a flurry of issues which ought to offer some food for thought, if not a whole lot of concern. We had data showing slowing industrial production in Japan in July, Trump threatening to pull out of the WTO (again) amid the potential for tariffs on $200bn of Chinese imports this week – while Chinese manufacturing for August rose but exports declined.

The Turkish lira was in volatile form as the central bank enacted measures to help ease its decline and bolster some support for the beleaguered currency and then we had news of weak German retail sales in July.

Equities declined, government bonds were better bid, credit spreads were better offered and primary was closed. Welcome September.

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