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Daily Archives: 3rd February 2019

3rd February 2019

Credit spreads squeeze, again

MARKET CLOSE:
iTraxx Main

71bp, +0.2bp

iTraxx X-Over

309.9bp, -1bp

🇩🇪 10 Yr Bund

0.17%, +1bp

iBoxx Corp IG

B+159.4bp, -1bp

iBoxx Corp HY

B+488bp, unchanged 

🇺🇸 10 Yr US T-Bond

2.68%, +4bp

🇬🇧 FTSE 100

6176.19, (+1.33%)
🇩🇪 DAX

12799.97, (+1.32%)
🇺🇸 S&P 500

3185.04, (+1.01%)

Recession risks loom amid a need for yield…

Forgive the pun but, unfortunately, January is not a dry run for the rest of the year. We were hit with a raft of disappointing data on the opening session of February (non-farms payrolls aside), and the stage is set for it to continue – likely leaving us with much more volatility (and weakness) through the rest of the first half of 2019 at least. Just as well we have plenty of performance in the bag from January – across all markets, to help cushion some of the blows which might be coming our way. They’re going to come. Because we knew we were heading into a soft period, and the numbers are now confirming that. Eurozone inflation is slowing, manufacturing activity across Europe is slowing (or in contraction) – and the same goes for China and the US (to some extent).

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