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Home, sweet home
The Eurozone cavalry to the rescue
Longs are scared, shorts are also scared. That sums up the price action in credit over the last month: an orderly sell-off rather than a plunge. We see spreads squeezing for the early part of this week though, thanks to the Eurogroup’s commitment to help Spanish banks. Yet, until we see signs that growth and confidence have stabilized in the Eurozone, we remain cautious on credit. Bonds remain tight to CDS, and still vulnerable to repricing wider, especially over an illiquid summer.
“Nationalising” credit
Anecdotally, credit flows have become very biased to home names lately. French investors have been focused on French credits, Italian investors on Italian credits, for instance. Rather than a coincidence, this reflects a bigger...
Read more: download the PDF in English below (15 pages)
The Eurozone cavalry to the rescue
Longs are scared, shorts are also scared. That sums up the price action in credit over the last month: an orderly sell-off rather than a plunge. We see spreads squeezing for the early part of this week though, thanks to the Eurogroup’s commitment to help Spanish banks. Yet, until we see signs that growth and confidence have stabilized in the Eurozone, we remain cautious on credit. Bonds remain tight to CDS, and still vulnerable to repricing wider, especially over an illiquid summer.
“Nationalising” credit
Anecdotally, credit flows have become very biased to home names lately. French investors have been focused on French credits, Italian investors on Italian credits, for instance. Rather than a coincidence, this reflects a bigger...
Read more: download the PDF in English below (15 pages)
