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Daily Archives: 14th April 2019

14th April 2019

2016 (or maybe 2017?) all over again

MARKET CLOSE:
iTraxx Main

56.9bp, -1.5bp

iTraxx X-Over

245.6bp, -3.6bp

🇩🇪 10 Yr Bund

0.06%, +6bp

iBoxx Corp IG

B+130.4bp, -2bp

iBoxx Corp HY

B+400bp, -9bp

🇺🇸 10 Yr US T-Bond

2.55%, +5bp

🇬🇧 FTSE 100

5993.28, (-0.37%)
🇩🇪 DAX

11073.87, (+0.07%)
🇺🇸 S&P 500

2955.45, (+0.24%)

Credit market lapping it up…

There are still a couple of weeks in which to get some business done either side of the long Easter weekend break. And chances are that credit Primary ought to be flying, equities will probably edge higher, fuelled by the potential for further eventual policy easing – while discounting a potentially poorer earnings season overall (bank results got us off to a great start), with credit spreads going tighter as market rates stay anchored.

We should position for that, with multi-asset players adding high beta credit into portfolios, while credit investors retain their bias (or increase) towards a higher beta portfolio positioning.

Brexit might have been seen as a catalyst for some major changes, but that’s a can kicked way down the road now, and will no longer weigh on the market like it once might have done. We still have the US/China trade talks and, to some extent, the earning season (as mentioned). But while we might be geared up for the latter to effectively disappoint (wrong-footed at the start with solid JPMorgan/Wells Q1 reports), the trade talks will likely just drag on. On policy, we believe that the ECB is going to loosen soon, while the minutes released last week suggest the Fed has set us up for a potential rate cut as well.

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