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If You Blinked You Probably Missed It

10 February 2015 by lberuti

The credit market is closing unchanged across the board. Indices hardly moved on a close to close basis, so you would be forgiven to think investors are very relaxed about the outcome of the negotiations between Greece and its European creditors. Those who were behind their screens watching the market will tell you a different story though, and there is little doubt that the next few weeks will bring some decent moves one way or another. While risk premia were slowly drifter wider in the morning, headlines of the European Commission offering a 6-month-extension to Greece so that they can renegotiate their debt send credit indices aggressively tighter (2.5bps on iTraxx Main and 12bps on iTraxx Crossover). They eventually stabilised, but shortly gapped back to their opening levels, when German officials denied the existence of such a compromise. Don’t let today’s daily moves fool you, the market consider there is much at stake in the current negotiations.