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12th January 2020

Kitchen sinking it

MARKET CLOSE:
iTraxx Main

43.1bp, +0.2bp

iTraxx X-Over

204.9bp, +1.1bp

🇩🇪 10 Yr Bund

-0.24%, -1bp

iBoxx Corp IG

B+105.4bp, unchanged

iBoxx Corp HY

B+344bp, -3bp

🇺🇸 10 Yr US T-Bond

1.81%, -4bp

🇬🇧 FTSE 100

5510.33, (-5.25%)
🇩🇪 DAX

9632.52, (-3.68%)
🇺🇸 S&P 500

2541.47, (-3.37%)

Easing in tensions boosts markets…

Borrowers are throwing the kitchen sink at it. There’s like a big black hole absorbing anything and everything that comes its way. There doesn’t appear to any repricing risk in the near term as the early year exuberance from borrowers and investors alike satisfy both sides of the equation.

This is a classic new year dynamic playing out to perfection. IG non-financial issuance can hit €40bn and senior deal volume can exceed €30bn – currently at €11.25bn and €16.5bn, respectively, without any repricing moves. Of course, it helps that equities are setting record highs more often than not in the US, and that we are in a de-escalation period following that US/Iran trouble while also waiting for that ‘phase 1’ deal between the US/China to be signed.

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