16 April 2015 by lberuti
After a few fairly muted sessions (even yesterday’s option expiry only saw subdued trading activity and low volatility), things started hotting up today. Greece was front and center. Even though it was denied by the Greek officials, Greece was said to have informally inquired about the consequences of a missed payment on their obligations towards the IMF. These rumours made investors uncomfortable and risky assets declined across the board. Credit was no exception and the the 55bps and 260bps levels which had recently capped every widening move on iTraxx Main and iTraxx Crossover respectively were taken out. A default would not necessarily presage a rapid euro exit, but capital controls would likely be imposed. Unsurprisingly, financial institutions underperformed other compartments of the market.