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Daily Archives: 27th February 2019

27th February 2019

Show me the risk!

MARKET CLOSE:
iTraxx Main

61.5bp, -1.2bp

iTraxx X-Over

273.9bp, -2.6bp

🇩🇪 10 Yr Bund

0.15%, +4bp

iBoxx Corp IG

B+146.5bp, -2.25bp

iBoxx Corp HY

B+451.5bp, -5bp

🇺🇸 10 Yr US T-Bond

2.68%, +4bp

🇬🇧 FTSE 100

6090.04, (-1.55%)
🇩🇪 DAX

12901.34, (-0.71%)
🇺🇸 S&P 500

3372.85, (+0.12%)

Markets’ buoyant February…

We’ve thrown all caution to the wind in these opening couple of months of the year – and it feels great. All asset classes have been on the up. The risk-on mood in the market has had equities push higher, credit spreads have ratcheted tighter and commodities have the wind in their sails. On the flip side – and classically it should not be the case, government bond market investors have also had a very good time out.

It means that we have plenty of performance in the bag, which we are going to need. Because recession risks loom amid the current slowdown, and dislocations in the aforementioned performances are going to come. However, in credit, is this 2009, 2014 or 2016 all over again? Or is central bank profligacy a busted flush as we try to contain the decade long build up of (debt) excesses with reduced effective firepower?
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