Following some good weeks, the indices turned sour again with increases in both iTraxx Main and Crossover. The G20 summit is ongoing and the global leaders are heading for more regulation of the financial sector. Furthermore, IMF will be given further resources (rescue funds will be tripled). In Sweden, the government extended its guarantee scheme.
The G20 summit this week is drawing a lot of attention. The first outcome seems to be more regulation for the financial sector and more funds to IMF. Global leaders took their biggest steps yet towards a more heavily regulated financial industry and a greater role for international institutions and emerging market governments. The leaders pledged to triple the resources of the IMF and to give China and other developing economies a greater say in the management of the world economy.
On another note, Moody’s released a report regarding origination activity in Q109 which was the second highest ever spurred by government guaranteed bank issuance. Corporate activity was also higher and was fairly well diversified by sector. The average deal size is skyrocketing, offsetting a relatively low number of deal counts.
Following some good weeks, the indices turned sour again. iTraxx Europe index trades at around 170bp compared to 160bp one week ago, while the Crossover index trades at 924bp versus 910bp one week ago.
