Credit outperformed equity for most of today in an uneventful start to the week. Flows were light and the markets lacked direction. Investors appear to be holding their fire ahead of key economic data later this week.
“Sovereigns, like the rest of the CDS market, were quiet today with the Markit SovX Western Europe unchanged on the day.”
“Tomorrow we have the Markit Services PMIs for the UK and eurozone, the ISM non-manufacturing report the same day, Bank of England and ECB interest rate decisions on Thursday and then on Friday the all important non-farm payrolls report. The latter, in particular, will help share views on whether additional QE is likely in November,” Gavan Nolan at Markit says.
Sovereigns, like the rest of the CDS market, were quiet today with the Markit SovX Western Europe unchanged on the day.
Belgium underperformed slightly amid new of yet more political turmoil. Flemish nationalist party N-VA, the top recipient of votes in the June general election, has pulled out of talks to form a government.
Political disunity has also played a part in Portugal‘s weak performance lately.
The minority Socialist government is having difficulty getting austerity measures through parliament. The main opposition objects to tax rises in the government’s budget plans.
“Until the budget is passed Portugal’s spreads could well continue to underperforms their peers,” vice president Gavan Nolan at Markit Credit Research points out.
- Markit iTraxx Europe 109.5bp (+1), Markit iTraxx Crossover 503.5bp (-0.5)
- Markit iTraxx SovX Western Europe 152bp (-1)
- Markit iTraxx Senior Financials 131bp (-3)
- Sovereigns – Greece 730bp (-18), Spain 228bp (+5), Portugal 407bp (+10), Italy 196bp (+5), Ireland 430bp (-8), Belgium 130bp (+4)
- BP 152bp (-9)
Latest Unique Market Activity
The trading activity in this report took place on 1st October 2010 and was published by Markit BOAT on the same day.
Trading activity reported with the ‘Market Condition’ flag is excluded from this report. Such trading activity is not relevant because the trade price and/or trading process does not reference or correlate with the then current market price.
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