A key indicator in Europe’s credit market is signaling that there’s trouble ahead for junk bonds. The European junk and high-grade CDS spread near the widest since 2020. According to IHS Markit indexes, the extra cost to protect against risky corporate bonds has more than doubled since last year. Kamil Amin, Credit Strategist, UBS AG…
Recent Reuters article highlights the concern of treasury markets facing liquidity risks as the Fed runs down its balance sheet. While the Federal Reserve is starting to let bonds mature off its $9 trillion balance sheet, volatility is expected to pick up as the market already suffers from low liquidity. Jonathan Cohn, Head of Rates Trading Strategy, Credit Suisse said…
Recent Bloomberg article highlights US and European banks’ losses on sinking buyout debt. With the Federal Reserve rushing to hike rates, credit risk premiums are surging beyond levels seen before. Nichole Hammond, Senior Portfolio Manager, Angel Oak Capital Advisors comments regarding this issue “Banks agreed to finance deals months ago and we’ve had a massive…
Just over two years ago at the onset of the coronavirus pandemic, the majority were perplexed by credit trading algorithms. In fact, dealers turned off their algos and handled corporate bond trading over the phone and through instant messages. Now, traders say robots are better equipped to price bonds during periods of market stress, in…
Although fixed income markets have been underperforming, BlackRock projects global bond ETF assets under management to reach $5 trillion by 2030. As bond ETFs have been gaining traction during times of near-zero interest rates, the pandemic and inflationary pressures, Salim Ramji, Global Head of ETF and Index Investments, BlackRock credits these catalysts to a “more…
Recent Bloomberg article reveals the next challenge to hit markets – liquidity or the lack thereof. While the US is recognized for having one of the most liquid markets, liquidity has slowly been drying up in the markets. One of many reasons is attributed to the Federal Reserve tightening monetary conditions by raising interest rates…
With trading volumes for US corporate bonds up
