Summary

  • Credit markets continue to be characterised by their volatility.
  • Several new issues from Nordic banks.
  • Further rating pressure on the pulp & paper industry.

Headlines from the credit market this week

With the agenda continuing to be driven by sovereign risk in Greece and the Iberian Peninsula, credit continues on its wobbly course. Economic news has been mixed with the US labour market recovery continuing to fall behind expectations – the latest setback came yesterday with disappointing data on both initial and continuing jobless claims. As long as the focus remains on the sovereign debt problems bank spreads are likely to be under pressure. With modest exposure to Greece and relatively sound public finances, the Nordic banks have outperformed in recent weeks – albeit modestly (see graph). iTraxx Europe currently trades at 88 basis points, whereas Crossover trades at 490bp, which for both indices represents a marginal tightening from last week.