Summary

    • It was a quiet week in the credit market with low activity
    • Some bank issuance but virtually no corporate issuance
    • Quarterly report from FDIC illustrates challenges for US banks

    Headlines from the credit market this week

    Activity has been rather low during the week with the credit markets looking for some direction. The newsflow continues to be on the weak side, but spreads have only reacted modestly to this during the week. On Tuesday, consumer confidence numbers from the US disappointed massively illustrating that the US consumer is still profoundly worried about the economic prospects – it is hard to blame him considering the continuing poor job market as well as a housing market that is looking quite weak again.

    In Europe, nothing is new as Greece continues to grab the headlines. The latest news is that S&P has said it will cut the current BBB+ rating by one or two notches. This would still leave Greece with an investment grade rating. iTraxx Europe currently trades at 87bp whereas Crossover trades at 475bp, which for both indices is a marginal tightening from last week.