Daily Archives: 7th May 2019

7th May 2019

Trade tensions sully markets

iTraxx Main

61.5bp, +3.2bp

iTraxx X-Over

266bp, 14.1bp

🇩🇪 10 Yr Bund

-0.03%, -4bp

iBoxx Corp IG

B+124.6bp, +2.3bp

iBoxx Corp HY

B+415.4bp, +11bp

🇺🇸 10 Yr US T-Bond

2.45%, -5bp

🇬🇧 FTSE 100

6144.25, (+1.26%)
🇩🇪 DAX

11657.69, (+1.33%)
🇺🇸 S&P 500

3036.13, (+0.74%)

Hanging on, though – the best we can…

The US market open turned a slightly negative session into a bit of a slump. Those US markets led the way as we all felt the jitters because of the reverberations of the Trump trade-related tweet from over the weekend. But we had a raft of data pointing to Germany Inc., in particular, continuing to feel the pinch. Manufacturing continued to disappoint with domestic weakness now a concern, while on the likes of Axel Springer, BMW and Henkel all missed on the earnings front. And for good measure (timing always perfect) the European Commission produced some bleak forecasts amid expectations that Italy would break EU fiscal rules on materially slowing growth.

€500m deal for Carrefour

In markets, we had a mixed albeit predictable response. Stocks in Europe had earlier comfortably held lower at 0.5% before succumbing as the US opened, plunging by up to 1.8% at one stage (Dax underperforming). Rates were better bid – which is no bad thing for fixed income investors after having seen some selling pressure last week. Credit was stable to edging wider amid little flow, although credit primary was in full swing for more defensive covered bond and SSA borrowers. Plain vanilla corporates were much quieter, with only Carrefour showing up although we did have a raft of new deals announced.

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