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Weekly Credit Strategy Update
7
0
Macroeconomic disturbances hurt markets
Fri, Oct 2 2009, 12:32 GMT
by Danske Research EmergingMarkets Team
Summary
- Spreads are moving wider
- Macroeconomic disturbances hurt markets
- Global financial stability report from IMF
Headlines from the credit market this week
CDS indices have widened considerably compared with last week. iTraxx Europe investment grade rose 13bp to 97bp while the high yield index has risen 30bp and now trades around 605bp. Following several strong months with macroeconomic surprises mainly on the upside, this week disturbance in the macro space was prevailing. After eight consecutive increases, ISM disappointed with a (although modest) fall. So did the CIPS manufacturing index in the UK. Taking into account the weak Chicago PMI and the very weak US auto sales in September (cash-for-clunkers rebate ended), the markets are set for a bumpy ride in the near future. On the other hand, positive underlying US consumer spending in August (adjusted for cars) and a strong rise in August pending home sales in the US ensured that everything didn’t suddenly go pear-shaped but clearly the direction in the coming months is highly unforeseeable.
The corporate sector was once again active in the primary market with Sanofi-Aventis having both a 5Y and a 10Y issue. Furthermore, Stora Enso carried out a 7Y private placement and Volvo printed USD0.75bn at 365bp over treasuries, which gives a comparable EUR level of around 280bp.
While there were no significant financial issuances, the covered bond market was very active with successful issues from Barclays, Swedbank and Danske Bank.
Published on Fri, Oct 2 2009, 12:34 GMT
Archive
- CDS indices remain range bound
Published On Fri, Nov 6 2009, 13:28 GMT - High spread volatility on the back of mixed economic news from the US
Published On Fri, Oct 30 2009, 18:24 GMT - The trend continues as spreads go gradually tighter
Published On Fri, Oct 23 2009, 10:49 GMT - Macroeconomic disturbances hurt markets
Published On Fri, Oct 2 2009, 12:32 GMT - Spreads are slightly tighter in an uneventful week
Published On Fri, Sep 25 2009, 09:40 GMT
Danske Bank
| Holmens Kanal 2-12, DK-1092 Copenhagen
http://www.danskebank.com/ | danskeresearch@danskebank.com
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This publication has been prepared by Danske Bank for information purposes only. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. Whilst reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance on it. Danske Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. Danske Bank's research analysts are not permitted to invest in securities under coverage in their research sector. This publication is not intended for private customers in the UK or any person in the US. Danske Bank A/S is regulated by the FSA for the conduct of designated investment business in the UK and is a member of the London Stock Exchange. Copyright () Danske Bank A/S. All rights reserved. This publication is protected by copyright and may not be reproduced in whole or in part without permission.Related reports
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