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Daily Archives: 9th December 2019

9th December 2019

Credit tone positive into year-end

MARKET CLOSE:
iTraxx Main

47.35bp, +0.35bp

iTraxx X-Over

220.4bp, +0.3bp

🇩🇪 10 Yr Bund

-0.31%, -2bp

iBoxx Corp IG

B+111.8bp, -0.5bp

iBoxx Corp HY

B+376bp, -1bp

🇺🇸 10 Yr US T-Bond

1.82%, -2bp

🇬🇧 FTSE 100

5510.33, (-5.25%)
🇩🇪 DAX

9632.52, (-3.68%)
🇺🇸 S&P 500

2541.47, (-3.37%)

Holidays are coming…

Finally, the markets are in wind-down mode, although in credit we think that there’s likely going to be the odd, previously unannounced offering in primary – but that’s about it. We can look forward to a ‘busy’ week nevertheless. There’s Lagarde’s inaugural ECB policy meeting which is probably going to gain more market importance than the UK election, both which come up on Thursday. Before that we have the FOMC, but they are also likely to be unmoved. Last week’s stellar non-farm payroll report for November will see investors likely retaining current strategies as they look ahead on how to play it in 2020.

Some big takeaways for this year include the massive and unexpected performances from all markets. Equities in many cases higher by 25% or more, Eurozone rates total returns of 8%+, the AT1 market in excess of a stunning 15% and IG credit in the 6.5% area. In primary, IG non-financial issuance smashed all records (€318bn), Sisal Pay’s €530m deal at the end of last week took the high yield market’s issuance to a record €75.04bn as well. And ten years on after the financial crisis, we’re starting to witness greater levels of financial sector issuance.

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