The presentation of the US financial stability plan has been the central topic this week. So far the plan has disappointed the market as it lacks detail. Credit indices are largely unchanged from last week and primary market activity continues to be high. In Norway, a second credit package was presented targeting a (voluntary) recapitalisation of banks.
The overriding themes in the credit market remain the same as in previous weeks: relatively stable CDS spreads, tighter secondary cash spreads, strong interest for corporate issues in the primary market, and focus on sovereign risk.
The investment grade CDS index, iTraxx Europe, currently trades at 154bp down from 157bp last Friday. The high yield index iTraxx Crossover currently trades at 1070bp up from 1050bp last week. Thereby the high yield index continues to underperform as has been the case over the past month.
