|🇩🇪 10 Yr Bund
|iBoxx Corp IG
|iBoxx Corp HY
|🇺🇸 10 Yr US T-Bond
|🇬🇧 FTSE 100
|🇺🇸 S&P 500
It surely can’t be as exciting this week. However, risk markets will possibly continue their rally. We are unlikely going to see the big moves of last week as the US stimulus euphoria most likely fades some. The opening rally was about getting ahead of the curve of the announcements due after the Jan 20 US Presidential inauguration. We would expect that it’s about taking baby steps higher from here.
Not least because other issues are emerging which might need a little focus. That is, US political chaos and intrigue. We’re likely going to see a bit of volatility, but the impeachment moves against Trump ought not to cause too much angst in the markets.
The general push higher in equities from now will nevertheless likely lead to a disproportionate tightening in credit spreads as poor secondary market liquidity elicits a good old fashioned squeeze in spreads. We’ve seen a bit of that, but with few chasing the market and waiting for primary, the tightening should accelerate through Q1.