Keeping Up the Pace

Topic of the day is undoubtedly the US election. Everyone is trying to guess not only what the result will be but also what the repercussions will be on Wednesday and beyond.

However, Europe is still on the table. IMF reports issued today highlighted the decline in France’s competitiveness, and this has opened up a discussion among credit traders of how to position themselves in French names. The French government has historically been supportive of the French industry whenever they have come under operational pressure.

Across the Atlantic, the US primary market was at full swing yesterday with record volumes of $20bn and more issued in a single session. European counterparts followed suit, and are now testing the waters with more companies such as Mapfre coming to the primary markets today.

In the secondary markets, volumes were weak but prices were firm. European HY indices reversed their weak openings as the tone improved throughout the session. Furthermore, even new issues were trading tighter on the grey market.

Returns have been good for many Investors year to date and many would have liked to lock in their profits and call it a day. The truth is that this easier said than done. Staying on the side-lines obviously has its repercussions if the market moves in favour as we have witnessed in the last couple of months and it does not take much to move the markets in this current climate. Liquidity has been dire and small volumes are having disproportionate effects on spread movement.