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Daily Archives: 16th September 2019

16th September 2019

Event risk swatted away

MARKET CLOSE:
iTraxx Main

46.5bp, +0.9bp

iTraxx X-Over

243.8bp, +5.5bp

🇩🇪 10 Yr Bund

-0.48%, -3bp

iBoxx Corp IG

B+119bp, -0.5bp

iBoxx Corp HY

B+393bp, +2bp

🇺🇸 10 Yr US T-Bond

1.85%, -5bp 

🇬🇧 FTSE 100

6026.94, (-1.27%)
🇩🇪 DAX

12591.68, (-0.54%)
🇺🇸 S&P 500

3349.16, (+0.22%)

Markets resilient as geopolitical risks rise…

The attack on Saudi oil installations over the weekend ought to have put a bit more of a dampener on the week’s opening session, as markets took up only a moderately defensive positioning. Oil prices rose by 10% and there might well be a medium-term impact on global macro, just as we assess the geopolitical implications for the region and beyond.

In addition, Chinese industrial production slowed by its greatest level since 2002 with a lower than expected rise in output of just 4.4% year-on-year in August, and down from 4.8% in July. So the nerves ought to have been jangling much more than they were, but markets put on a decent performance amid the rising event risk/slowing macro.

In credit, though, the action was squarely in primary amid a flurry of deals in the day, and we’re most certainly looking at a record for the full year for volumes in the euro-denominated IG non-financial corporate bond market. There’s no stopping the corporate bond market.

Credit spreads continued to tighten amid fears of tightening secondary market liquidity come November when the ECB resumes its bond purchase programme and we saw more of the compression between high and low beta markets.

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