Summary
- Credit spreads have moved wider during the week
- Q1 earnings are a mixed bag so far
- IMF remains concerned about financial stability
Headlines from the credit market this week
This week has provided us with further earnings from the larger financials. Market participants seem to be putting more weight on the balance sheet values than the income statements – the quality of the former is still a huge question mark, while the latter was generally better than expectations. Cash bonds are still very well bid and offers are hard to find. This positive trend is not followed by the CDS market where we saw the investment grade index, iTraxx Europe, widening by some 5bp during the week and is currently trading around 153bp, while the high yield index, iTraxx Crossover, has widened by some 18bp to 848bp.
In the primary market the good activity continues and the bonds launched during the week performed well after issuance.
