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Weekly Credit Strategy Update
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The weeks of the negative news
Fri, Jun 6 2008, 15:23 GMT
by Danske Research Team
The week was characterised by a great deal of negative news in the banking sector. The rating agencies swung their axe on both the US broker-dealers and bond insurers; the UK housing market continued to weaken; and the prices on asset-backed securities (ABS) contracted. Despite the negative sentiment, we witnessed some activity in the primary market.
The negative news during the week – mainly the downgrade of the US broker-dealers – weighed on spreads and took iTraxx Europe some 9bp higher to 87bp. High-yield credit spreads in iTraxx Crossover also widened and finished the week some 30bp higher at 477bp. On the whole, it appears as if the positive sentiment in the credit markets has lost some of the momentum it gained after the rescue of Bear Sterns back in March. We remain cautious as we think the ongoing tensions in the money markets, significant tightening of lending standards, as well the sharply deteriorating signs from the real economy will weigh on spreads.
Published on Fri, Jun 6 2008, 15:25 GMT
Archive
- The crisis seems to be affecting Europe on a larger scale
Published On Fri, Oct 3 2008, 12:48 GMT - During the week money market distress reached new heights
Published On Fri, Sep 26 2008, 13:07 GMT - The most dramatic week ever in the credit market
Published On Fri, Sep 19 2008, 13:35 GMT - Fannie Mae and Freddie Mac taken over by the US Treasury
Published On Fri, Sep 12 2008, 13:12 GMT - The change from ECB in its collateral framework took indices wider at the end of the week
Published On Fri, Sep 5 2008, 10:50 GMT
Danske Bank
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