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Daily Archives: 20th October 2020

20th October 2020

🗞️ As SURE as a bond issue can be

iTraxx Main

54.8bp, +0.8bp

iTraxx X-Over

330.8bp, +2.7bp

🇩🇪 10 Yr Bund

-0.60%, +3bp

iBoxx Corp IG

B+122.5bp, -0.5bp

iBoxx Corp HY

B+464.5bp, -1bp

🇺🇸 10 Yr US T-Bond

0.78%, +2bp

🇬🇧 FTSE 100

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🇩🇪 DAX

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🇺🇸 S&P 500

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Cheap funding, it’s race to the bottom…

It is looking increasingly likely that the European economy is heading for a double-dip recession, putting an end to the nascent recovery observed since we emerged from the initial lockdown. The ECB’s Lagarde is voicing her concerns just as the BoE is too – as it starts the process of readying the UK financial system for negative rates. The US stimulus is coming – but not before the election, which itself has descended into chaos and farce.

We would think that the ECB will extend and/or add to the current range of QE programmes it has in place. And no doubt the UK will be cutting rates as well as adding more QE to provide assistance to an economy under pressure from the epidemic, and will especially be so if a no-deal Brexit becomes a reality.

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