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Daily Archives: 26th September 2019

26th September 2019

Pulling down the curtain on Q3

MARKET CLOSE:
iTraxx Main

56.3bp, +0.7bp

iTraxx X-Over

233.1bp, +2.1bp

🇩🇪 10 Yr Bund

-0.58%, unchanged

iBoxx Corp IG

B+124.6bp, unchanged

iBoxx Corp HY

B+413bp, unchanged

🇺🇸 10 Yr US T-Bond

1.69%, -4bp

🇬🇧 FTSE 100

6026.94, (-1.27%)
🇩🇪 DAX

12591.68, (-0.54%)
🇺🇸 S&P 500

3349.16, (+0.22%)

Calm transcends the corporate bond market…

With just a couple of session to go, we look back at a rather mixed month for credit investors. Awash with new issuance and with the best month for IG non-financial deals since 2014, IG spreads only widened by 4bp (iBoxx index) and total returns have delivered a rare monthly loss for 2019, of 0.9%. Clearly, we can ascribe the weakness in spreads to the heavy issuance volumes (almost €50bn) even if has been extremely limited, where support for the market benefits from pent-up demand and the upcoming ECB purchase programme.

As for the near 1% loss in returns month to date, that is predominately rates-related, given the sharp reversal in Bund yields from off record lows from early September. The yield on the 10-year has risen from -0.71% to -0.59% currently, for example, with a similar move in the front end.

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