25 March 2014 by HCM
Recently, credit was only knowing one way: tighter. But today, even though equities were marching higher, credit was unchanged. The fair value of the major indices was unchanged and the move of iTraxx Crossover was only due the basis converging towards zero. The iTraxx Financial Subordinated index was even a tad wider, as the new issue calendar has been very heavy recently, especially in the financial space. The AT1 compartment has been very busy, with 3 new deals today alone and a jumbo Deutsche Bank (5bln€) rumoured to reach the market very soon. With that supply which keeps coming and the roll come and gone, people are less hesitant about lifting CDS offers. It is a bit early to call it an indigestion, but the market definitely made a pause toady.