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Daily Archives: 31st January 2019

31st January 2019

Big squeeze closes credit in January

MARKET CLOSE:
iTraxx Main

70.8bp, -2.6bp

iTraxx X-Over

320.9bp, -10.2bp

🇩🇪 10 Yr Bund

0.15%, -4bp

iBoxx Corp IG

B+160.2bp, -4.6bp

iBoxx Corp HY

B+488bp, -7bp

🇺🇸 10 Yr US T-Bond

2.64%, -5bp

🇬🇧 FTSE 100

6382.41, (-0.64%)
🇩🇪 DAX

12430.56, (-0.45%)
🇺🇸 S&P 500

3112.35, (-0.28%)

Solid month but choppy waters ahead…

Across all markets, January has been a good month in performance. Equities, commodities, rates and credit have all delivered surprisingly good returns. That’s not necessarily all good. It highlights a relief trade in equities after a damning 2018 where dovish policy keeps rates low and liquidity in plentiful supply. Macro worries keep the bid for rates well-supported and yields anchored while credit has slipped in there somewhere as a ‘hybrid alternative’. There were odd months in 2018 which played out the same way only to be swept away later by a tsunami-like weakness, where it really felt like a financial market crash was coming. We dare think 2019 will follow the same path. After all, the issues which troubled markets in 2018 are still with us now.

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