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Daily Archives: 17th November 2019

17th November 2019

Credit ticks all the boxes

MARKET CLOSE:
iTraxx Main

48.9bp, -1bp

iTraxx X-Over

235.2bp, -6.2bp

🇩🇪 10 Yr Bund

-0.34%, unchanged

iBoxx Corp IG

B+113.5bp, +1bp

iBoxx Corp HY

B+399bp, +1.5bp

🇺🇸 10 Yr US T-Bond

183.5%, +1.5bp

🇬🇧 FTSE 100

7409.13, (-0.58%)
🇩🇪 DAX

13744.21, (-0.01%)
🇺🇸 S&P 500

3380.16, (+0.18%)

Half time report…

We’re at the halfway stage of the month, and it’s fair to say that credit markets have held up fairly well despite the (largely) trade-related unease which, at times, has been affecting equities. Despite general weakness in credit markets in the past week, IG spreads are unchanged this month, while the high yield market is tighter (iBoxx index, -8bp).

We have seen some widening in spreads in the CoCo market (index +11bp) but having tightened by almost 250bp already this year, we can forgive some moderate levels of weakness, especially where year to date total returns exceed 14%. We think all that represents a clean bill of health for the corporate bond market. Lest we forget, IG non-financial issuance has topped €16bn and we have absorbed almost €11bn of HY rated debt already this month.

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