Although the credit markets appeared to shape up somewhat on the back of the dovish statements by the FED about two weeks ago, uncertainty prevails on the market outlook.
German benchmark bond yields closed at 0.09 per cent last week, approaching a record low level. Investors' interest in safe havens remains high as long as the market is uncertain as to whether the central banks will succeed in triggering a significant economic recovery.
European credit indices closed higher with iTraxx Main increasing 6bp to close at 79bp, while iTraxx Crossover spiked 32bp to close at 336bp.
In the primary market, Danske Bank executed EUR mandates for Leaseplan (EUR750m) and Lloyds (LON:LLOY) (EUR1.25bn) last week. FedEx (NYSE:FDX) (Baa2/BBB) printed EUR3bn, the latest US company to issue debt in Europe. Lower European interest rates could make primary deals in Europe more tempting for US companies.
The Norwegian labour market continues to suffer from the depressed activity in the oil sector. Last week as many as 2,500 job cuts were announced. Sentiment in the Norwegian HY market, however, has turned more positive since the Easter break, with relatively more bond spreads tightening.
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