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Daily Archives: 29th September 2019

29th September 2019

Finishing line is in sight

MARKET CLOSE:
iTraxx Main

56.2bp, unchanged

iTraxx X-Over

233bp, unchanged

🇩🇪 10 Yr Bund

-0.57%, +1bp

iBoxx Corp IG

B+124bp, -0.5bp

iBoxx Corp HY

B+414bp, unchanged

🇺🇸 10 Yr US T-Bond

1.69%, +1bp

🇬🇧 FTSE 100

6026.94, (-1.27%)
🇩🇪 DAX

12591.68, (-0.54%)
🇺🇸 S&P 500

3349.16, (+0.22%)

Can’t keep him out of the headlines…

The quarter draws to a close with many of the risks besetting us all year and potentially serving to derail the markets still with us. Trump obviously tops the list of risks, but Brexit has moved up to second spot as no-deal becomes a clear and present danger. Weakening macro always lurks as a big concern just as the US/Chinese trade dispute potentially breaks new ground, and we have the Middle East geopolitical risks entering the top five in the list of imponderables.

With situations intensifying in several cases, the accompanying market jitters might serve to stymie any hopes of a material rally in risk assets (namely equities) as safe havens come into focus once again. Credit has so far avoided much of the periods of broader market volatility. Investors have found a way to manoeuvre the pitfalls, and have instead gorged on the copious amounts of deals as well as having clipped excellent corporate bond portfolio performance – that particular dynamic is unusual.

Euro-denominated IG credit has returned 6.7% year to date, sterling IG credit 11.2% and the AT1 market 12.3% (iBoxx). Non-financial IG corporate issuance levels have exceeded €250bn and we now have an eye now on the full-year record (€285bn/2009), while the HY market is closing in on last year’s €62bn total (currently at €48bn).

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