We remarked last week that emerging markets could face a difficult time ahead. Well, we didn’t have to wait long before the early maneuvers in a possible currency war had an impact on sovereign CDS spreads. Vietnam was one of the first to move by devaluing its currency and widening the trading… Login to Read

Back in 2010, Brazil’s finance minister Guido Mantega warned that the world was in the midst of a “currency war” in the wake of US quantitative easing. The term is now back in vogue after China made the shock decision to devalue its currency. China has a “dirty” peg against the US dollar, and the…

Spain is often held up as an example of how austerity works, and Markit data published on August 5 provides some support to this view. Markit PMIs for August showed that Spain was leading the way in the eurozone’s economic expansion. There are major questions over the country’s labour market – unemployment remains at stratospheric…

Commodities strain Latam corporate credit The recent commodity downturn has sent Latam corporate bond yields surging, just as the US looks set to raise interest rates. Brazil’s 5-yr CDS spread has widened 31bps over the past week as commodity slump hits Latam corporate bond yields have diverged from their emerging… Login to Read More...

The all-important deadline of July 20 has passed without incident, Greece having redeemed its debt to the ECB with the help of a bridging loan. This doesn’t mean the crisis in Greece is resolved – far from it – but it does give the market some breathing space. We remarked last week that China may…

Greece’s position as the dominant driver of market sentiment has been unassailable in recent months. But there may be a hiatus if an agreement is reached on bridging finance for Greece, potentially leaving room for another theme to shape credit spread direction. If Greece does become a secondary consideration – and that is a very big…

Pressure on Euro banks pushes spreads wider European financials have seen their credit risk nearly double since March, steered by the prospect of less government aid for banks and the ongoing Greek crisis. Markit iTraxx Europe Senior Financials is at its widest level since March 2014… Login to Read More...

Puerto Rico credit risks largely isolated Puerto Rico’s unsustainable debt problems have intensified this week, but the wider municipal bond market has so far remained resilient. Puerto Rico’s 2035 general obligation bond has seen its price drop from 77 on Friday June 26th to 66.2 on June 30th… Login to Read More...

It has been said that Greece’s influence within the eurozone seems to outweigh its relatively diminutive size. After all, its GDP is less than 2% of the total in the currency bloc (2014, current prices). But it is not just in politics that Greece punches above its weight. The performance of the credit markets… Login to

There are many words synonymous with the European sovereign debt crisis, the portmanteau ‘Grexit’ being the most in vogue. But a word that was thought to have been banished by the ECB – contagion – has returned to the discourse this week. Spreads in Italy, Spain and Portugal – the peripheral countries most exposed to…