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Daily Archives: 6th February 2019

6th February 2019

Special place in Hell? Surely not

iTraxx Main

69.9bp, +0.4bp

iTraxx X-Over

306.8bp, +2.2bp

🇩🇪 10 Yr Bund

0.16%, -1bp

iBoxx Corp IG

B+152.1bp, -3bp

iBoxx Corp HY

B+475bp, -6.5bp

🇺🇸 10 Yr US T-Bond

2.68%, -2bp

🇬🇧 FTSE 100

6176.19, (+1.33%)
🇩🇪 DAX

12799.97, (+1.32%)
🇺🇸 S&P 500

3185.04, (+1.01%)

Credit on a roll…

We are barely six weeks into 2019 and we have an almighty squeeze occurring in spreads in the corporate bond market. Investment grade spreads have tightened 20bp (iBoxx index) while the solid support for the underlying has meant that we have already managed total returns of 1.5%. The high yield market, supposedly going to suffer from the macro slowdown this year, is experiencing a squeeze of its own with the iBoxx index 49bp tighter and returning 2.8% year to date. The sterling market is performing the same as the asset class across the board finds a very good level of support. And we can’t even point a finger at the manipulative impact of the ECB’s QE bond buying.

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6th February 2019

Ring (ING) in the profits | Bank Capital Insights

Beauty in its simplicity…

ING reported Q4 and fully year 2018 earnings on Wednesday morning and investors seem to like the simplicity of the underlying business model and overall ease in understanding the drivers of its earnings.  Net income for 2018 came in at EUR 4.7 billion (despite the EUR 775 million of regulatory settlement costs) translating to a soild ROE of 11%.

The bank’s stock was up almost 6% on the day despite the overall banking sector being down.   After years of internal restructuring and unwinding of the bank assurance model, the bank is finally starting to show the benefits of its simple yet powerful business model.

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