04 November 2014 by lberuti
There are plenty of macroeconomic data this week. Today we had PMIs across Europe which were a mixed bag. The political backdrop in Europe keeps deteriorating, with recent polls showing Podemos leading intentions in Spain for instance. And worrying noise is coming out of Ukraine once more. But all that will only eventually become relevant after Thursday when the ECB meeting is taking place. Investors think that recent developments regarding (the absence of) inflation and potential de-anchoring of market expectations will force Mr Draghi to a more accommodative stance despite German opposition. Most assume that it will eventually lead to corporate bond purchases and they are putting their money at work accordingly. As such purchases will revolve around investment grade companies, it is therefore not surprising that decompression has been a major theme over the last few sessions. Whatever the general direction of the market move, iTraxx Crossover has systematically underperformed iTraxx Main during last week.