12 August 2014 by HCM
When you look at this grapple, it is difficult to imagine that all indices without exception closed wider on the day. And it has to be said that for most of the day, the tone was quite constructive on the market as a whole benefitting from the good session experienced by the peripheral banks. iTraxx Main protection felt offered for the best part of the session on the back of that. But a couple of hours before the close, credit indices began to drift wider for no obvious reason (there was no new development in the Ukrainian situation nor any macro or idiosyncratic news). Usually one would expect single names to follow suit at least to some degree, but not today. It looks as if investors were not really eager to buy protection from dealers and the latter were happy to wait until tomorrow morning for an overnight confirmation of this trend before reracking their levels. We shall see tomorrow whether indices go back to their recent grind tighter or if single names CDS play catch at the open. Today, the late move was only down to a widening of the basis between credit indices and their fair values.