Secondary volumes were slightly below normal and the dealer sell vs buy ratio dipped below it's usual 3x ratio. The new issue market has been relatively quiet this week; so far today, I'm hearing only of potential deals from FO and ETR.
At the risk of repeating myself, the negative basis continues to narrow. JPMorgan is making the case that this could even roll to a positive basis. They also make the case that bank credit ratios should improve in this current environment of a steep yield curve and active markets.
Bloomberg news has an interesting story about the difference in expectations between the dealer poll and the futures markets about the path of short term interest rates.
Given how far the credit markets have rallied, I feel like we could be setting up for a pullback or fall. Often exogenous geopolitical events can be the cause or perhaps just a cue. However, checking on the prediction markets on the InTrade website, I'm somewhat assuaged as their markets show few, if any, pending problems. Apparently, most folks are not worried about the pending "merciless offensive" from North Korea.
No comments:
Post a Comment