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Ukraine? Nothing To Worry about

06 March 2014 by HCM

The volumes traded last week were published yesterday by DTCC, and by and large they confirmed what the price action indicated. If the mini Emerging Market crisis we went through in late January spooked investors, the Ukrainian situation is not worrying them. Over the last couple of weeks, even though the situation was clearly deteriorating, risk premia were on the way down and volumes were diminishing as well, both pointing to a contained need (and will) to hedge. We had a very brief spike in risk aversion on Monday, but since the “grind tighter” (that is how credit market participants called a gradual erosion of risk premia) has resumed. Issuers actually made the most of this positive attitude, as a raft of new issues were brought to the market over the last 3 days.