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Daily Archives: 21st January 2020

21st January 2020

🗞️ Hmmm, markets ready to go again

MARKET CLOSE:
iTraxx Main

43.4bp, +0.4bp

iTraxx X-Over

211.1bp, +2.6bp

🇩🇪 10 Yr Bund

-0.25%, -4bp

iBoxx Corp IG

B+102bp, unchanged

iBoxx Corp HY

B+337.6bp, +4bp

🇺🇸 10 Yr US T-Bond

1.77%, -6bp

🇬🇧 FTSE 100

7042.47, (+0.35%)
🇩🇪 DAX

12774.88, (-0.12%)
🇺🇸 S&P 500

3116.39, (+0.32%)

As coronavirus spread dampens the mood…

The growing concerns around the spread of the new coronaviras which is sweeping through China are being felt in the markets. Should it be eventually be contained and managed as other Sars-like viruses have been, then market recoveries will be swift. Until then, headline risks will keep risk markets in a cautious mood. Equities came under some pressure although we managed to recover much of the losses, rates were seen better bid and secondary credit was unchanged with primary still printing a plethora of predominately financial issuance.

Busy credit primary markets are likely going to be the case through all this week. Once again, we observe that we have not quite seen the high levels of deal flow from plain vanilla non-financial corporates that most investors have been anticipating. Nonetheless, demand for the deals on offer is at very high levels and this is going to be sustained through the first quarter.

Not that we are cheerleaders for institutional IG non-financial corporates, but that pent-up investor demand is good news for borrowers. The market is in excellent shape and receptive. Deals dynamics are unchanged compared to what we saw through most of 2018/9 – and set to stay that way for the foreseeable future if the plain vanilla corporate bond dynamics remained unchanged.

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