Spreads have remained more or less stable compared to last week but intraweek volatility has been substantial on the back of some mixed news from the US. Bernanke has indicated that the primary dealer lending facility will be extended into 2009, but markets turned sour after questions were raised over the solvency of Fannie Mae and Freddie Mac. In Denmark one of the larger mid-sized Danish Banks, Roskilde Bank, has put itself up for sale.
Despite substantial volatility during the week, spreads ended more or less at the same level as last week, with iTraxx Europe trading at 103bp and iTraxx Crossover at 542bp (+12bp from last week).
The newsflow has been somewhat mixed and the ongoing rise in oil prices – lately following the Iranian missile tests – are not conducive to improving market sentiment.
Despite the somewhat weak sentiment and the summer holiday, we have actually seen some new issues coming to the market this week. In the Nordic countries both SEB and Svenska Handelsbanken have tapped the market with 3Y senior paper.
