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Daily Archives: 10th November 2019

10th November 2019

Buy the dip opportunity

MARKET CLOSE:
iTraxx Main

49.2bp, +0.9bp

iTraxx X-Over

233.8bp, +2.5bp

🇩🇪 10 Yr Bund

-0.26%, -2bp

iBoxx Corp IG

B+109.4bp, +0.5bp

iBoxx Corp HY

B+385bp, +2bp

🇺🇸 10 Yr US T-Bond

1.94%, +1bp

🇬🇧 FTSE 100

5510.33, (-5.25%)
🇩🇪 DAX

9632.52, (-3.68%)
🇺🇸 S&P 500

2541.47, (-3.37%)

Keep believing, for now…

The sell-off in the underlying has presented credit market investors with a near-term buying opportunity. It will keep spreads supported into year-end, although we are likely going to see an impact on total returns in low beta sectors of the credit market. No sweat. Given where the numbers are in credit so far this year, there is enough of a buffer to ensure that we close out far in excess of the pitch made to investors when we started the year. 6.2% total return in IG (iBoxx)? Not bad at all. 14% from the AT1 market – that’s excellent. And what about 9.1% in a high yield market that was supposed to feel the pressure from macro weakness? We think that there is a little more upside to those numbers to be had before we close up in 2019.

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