The strong sentiment has returned and spreads are moving tighter

Weekly Credit Strategy Update

Summary

The strong sentiment has returned and spreads are moving tighter
Primary market activity continues to be immense and new issues perform
We have initiated coverage of Danish utility company DONG Energy

Headlines from the credit market this week

The rally is back in the credit market, fired on by continued high activity and strong performance in the primary market. The investment grade index, iTraxx Europe, currently trades at 123bp down from 133bp on Friday, while the high yield index, iTraxx Crossover, trades at 750bp down from 790bp on Friday. The senior financials index has strongly outperformed the main index in recent weeks and now once again trades at a tighter level (as it should in our view). The good feeling in the market goes hand in hand with lower volatility and the VIX index is currently falling steadily.

The primary market continues to be extremely hot. During the first three days of the week, there have been a large number of new deals including several from the Nordic region. The Danish brewer Carlsberg came to the market with both a EUR and a GBP issue. The bonds tightened by some 40bp after issuance.

Download full Weekly Credit Strategy Update with charts

Published On Wed, May 20 2009, 12:32 GMT

About this Report

Danske Bank A/S

http://www.danskebank.com/

danskeresearch@danskebank.com

More Reports from this Contributor

Archive

Decent macro numbers and Q4 reports drive spreads tighter
Fri, Jan 27 2012, 10:37 GMT
Continued positive sentiment in credit markets; credit indices grinding tighter.
Fri, Jan 20 2012, 12:53 GMT
CDS indices have performed during the week
Fri, Jan 13 2012, 16:15 GMT
CDS indices are slightly up compared with year-end.
Fri, Jan 6 2012, 16:50 GMT
Big LTRO allotment should be positive for credit
Fri, Dec 23 2011, 14:18 GMT

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