Lufthansa is one of several airline credits to have seen its CDS spreads tighten in line with the falling oil price. But the tragedy last week has led to investors focusing on the German firm, and the scrutiny is inevitably negative. At the beginning of March Lufthansa’s… Login to Read More...

The bearish sentiment around Latin American credits was reversed last week as the US Federal Reserve signalled a more cautious economic outlook and subsequent slower path for monetary tightening. Vast quantities of emerging market debt, like that in Latin America, are denominated in US dollar…. Login to Read More...

It’s that time of the year again when CDS market participants turn their attention to technical, rather than fundamental, factors. The Markit credit indices (iTraxx and CDX) roll every six months, and March 20 will see the first roll this year. This can result in significant dislocations between the… Login to Read More...

Central bank domination of financial markets entered another level this week with the commencement of full QE in Europe. National central banks, at the behest of the ECB, began their purchases of government bonds on March 9. Yields on sovereign bonds in several countries were already negative before the start of QE, and they descended even further…

When it comes to how banks finance their activities, there is little doubt we are in a new era. If anyone did question that the climate has changed, then a little-known Austrian institution may have caused them to think again this week. The government of Austria announced that Heta Asset Resolution, the “bad bank”… Login

It is a truism that the CDS product garners more headlines when companies default or are close to triggering a credit event. Last week we saw a typical example, and it will surely be the case next week as well. A credit event auction was held for Caesars Entertainment… Login to Read More...

European investment grade credit has comfortably outperformed its US counterpart over the past 12 months. Based on the differing fortunes of the respective economies in the two regions, this might seem surprising. But the basis between the Markit iTraxx Europe… Login to Read More...

This week we saw the first signs of contagion, albeit tentative, from the impasse in Greece. Spain, where the anti-austerity Podemos party is leading the opinion polls, saw its CDS spreads widen 11bps to 94bps (2003 ISDA definitions), while Italy was 13bps wider at 113bps…. Login to Read More...

Greece was relegated to “emerging market” status by several index providers last year, and its recent turmoil seems to justify the reclassification. But the ongoing problems in the Hellenic Republic shouldn’t overshadow issues in sovereigns more familiar to EM investors…. Login to Read More...

The result of the Greek elections on Sunday were quite clear – an emphatic victory for the anti-austerity SYRIZA party. The Greek public have signalled that they want to move in a different direction from the path of austerity… Login to Read More...