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Daily Archives: 3rd March 2020

3rd March 2020

🏦 Fed blinks, wastes a bullet

MARKET CLOSE:
iTraxx Main

64.2bp, -3.9bp

iTraxx X-Over

288.9bp, -20bp

🇩🇪 10 Yr Bund

-0.64%, -2bp

iBoxx Corp IG

B+126bp, -2bp

iBoxx Corp HY

B+421bp, -18bp

🇺🇸 10 Yr US T-Bond

0.96%, -12bp

🇬🇧 FTSE 100

6049.62, (-1.73%)
🇩🇪 DAX

12489.46, (-0.04%)
🇺🇸 S&P 500

3152.05, (-0.65%)

Rate cuts aren’t gonna cure Covid-19 (sadly)…

Textbook stuff. Markets collapse > Word emerges that the central banks are going to cut rates > Markets rally > Investors look to get ahead of the curve and buy into it. In credit, the primary window opens and a few nimble operators get some funding away. And so another crisis event falls by the wayside.

Throwing greater levels of liquidity at any problem seems like it will do the trick. It’s worked every time over the past financial crisis-ravaged decade. Anyone would think that cutting rates/pumping the system with more (cheaper) liquidity is the Covid-19 cure.

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