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Daily Archives: 2nd September 2019

2nd September 2019

That’ll do nicely

MARKET CLOSE:
iTraxx Main

48.8bp, unchanged

iTraxx X-Over

250bp, -3bp

🇩🇪 10 Yr Bund

-0.69%, +1.5bp

iBoxx Corp IG

B+122.3bp, +1.5bp

iBoxx Corp HY

B+424.5bp, unchanged

🇺🇸 10 Yr US T-Bond

1.50%, unchanged

🇬🇧 FTSE 100

7167.95, (-0.61%)
🇩🇪 DAX

12670.11, (+0.32%)
🇺🇸 S&P 500

2989.69, (-0.21%)

Fixed income performance continues to shine…

Equities have, at times, buckled under the strain of the US/China trade headlines. Corporate credit seems to be losing its head in a fog of negative yields just as primary debt offerings print with zero coupons. Price now matters more than yield. The rates market has become the investment for choice as investors front-run the central banks pushing prices higher, and yields have felt the strain of the demand. Who would have thought that we’re talking in terms of option-like returns for Eurozone government bond market investors so far this year?

Normally an unexciting market, lumbering and low or no returns (easily less than 1% typically in any given year) but Eurozone government bonds have rallied hard and put 10.5% or more of performance in the bag for investors for the year to date. They added 2.7% in August alone. Clearly, fixed income came out tops in August, with all markets returns higher while equities sagged in comparison – for a change.

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