Volatility remained high on global credit markets last week as risk sentiment continued to fluctuate with the oil price, which recovered somewhat on market expectations that Russia and Saudi Arabia would cut production. The Bank of Japan cutting interest rates to negative territory provided a further boost for the overall market sentiment.
During the week, the Itraxx Main (5yr) tightened 1bp, closing at 92.3bp, while Itraxx Crossover (5yr) tightened 1bp and closed at 369bp.
Primary activity remained muted last week, causing January 2016 to become the weakest month since 2008 in terms of corporate issuance in EUR (2016: EUR5.2bn vs. 2008: EUR7.2bn).
The reporting season kicked in last week with a few results out from major global issuers. As in 2015, commodity related sectors continue to struggle with demand and supply imbalances, while other sectors generally performed in line with expectations. We advise investors to watch for more reports due this week.
On Friday we published our new SEK credit outlook for 2016 with some updates on the SEK credit market and our views on the coming year including spread forecast and top picks per category.
To read the entire report Please click on the pdf File Below