Intelligence

HY Sunshine

The week was generally blunt. Prices in EM HY bonds continued to appreciate although it looked pretty weird already. 30y US T was traded above at 108 yielding below 2.15, the levels we could hardly recollect. Extremely better than expected us jobs figures failed to alter the situation much. After a very short lived retracement the bonds went even higher. Further volatility is expected there.

The week was generally blunt. Prices in EM HY bonds continued to appreciate although it looked pretty weird already. 

30y US T was traded above at 108 yielding below 2.15, the levels we could hardly recollect.

Extremely better than expected us jobs figures failed to alter the situation much. After a very short lived retracement the bonds went even higher. Further volatility is expected there.

The situation in European banking sector and especially in Italy continues to worry investors as it seems that Italian regulators do not have ready answer of how to tackle the situation. Italian PM Mateo Renzi meanwhile said that the real problem for Europe would be Deutsche Bank with all its outstanding derivatives totaling some USD75 trln (20 times German GDP). 

Deutsche Bank bonds were under the pressure all week long. Senior debt gave up some 1 big figure while hybrids lost almost 6 big figures.

Amongst other deutsche bank papers we have witnessed some exiting dynamics in Bremer Landesbank perpetual. The bond dived from 119 to 71 in just a couple of days. 

The markets in Indonesia and Malaysia were not particularly active due to national holidays.

China was under the pressure

 

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