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“Malevolence Tempered By Incompetence”

30 January 2017 by lberuti

This is how Lawfare described on its blog the immigration ban targeting seven Middle Eastern countries which the Trump’s administration decided to put in place over the week-end via an executive order. The US initiative was met by massive protests around the world as well as legal setbacks. Even financial markets, which have so far gave the new American President a vote of confidence, reacted defensively to say the least, and showed their first signs of concern. In creditland, there is still an overhang of single name protection in the dealer community though, particularly in High yield. Up to now, they have been happy to recycle these short risk positions with arbitragers who are helping to keep the market in check as they sell index protection. It will not be long before that source runs dry though, and the market could be more volatile in the coming sessions, especially if we keep exploring wider levels.