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Into the FOMC at Full Speed

16 December 2013 by HCM

For once the market will wait a little longer than usual before enjoying its Christmas break. This week is packed with events, particularly for CDS. It will begin with the credit index option expiry on Wednesday, shortly followed by the FOMC meeting and the much anticipated decision of the FED regarding tapering. It will eventually conclude on Friday with the roll and the launch of the new 5 year maturity, which will be March 19 during the next 3 months. By the shape of this grapple, taper is not really playing on people’s mind as we are going into the decisive FED’s meeting at the tightest levels of the year. Every index has enjoyed a good ride in 2013, with iTraxx Main tightening 32bps (that is more than 1.5% excess return) and CrossOver 180bps (that is more than 8% excess return). And that does not even factor in the carry earned by all the investors who own risk…