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Not A Walk In The Park But...

29 June 2015 by lberuti

When the news broke on Friday night that Greece will hold a referendum on Sunday 5th July to decide whether they want a chance to remain part of the Euro (even though the question is not spelt that way), and later during the week-end that bank holidays would be imposed in Greece until then (some banks might actually open next Thursday), market participants feared the worst and the opening levels of credit indices reflected a good deal of risk aversion. iTraxx Main (ITXEB) traded at 80bps and iTraxx Crossover (ITXEX) at 350bps, up from 66.5bps and 290.75bps on Friday. These were actually the widest levels and from there some two way flows developed. The session felt orderly and protection sellers effectively dominated the debate during the best part of the day, taking ITXEX to 325bps and ITXEB to 74bps before a late protection buying spree almost took the market back to the opening levels on little volumes. So in credit, it would be tough to say it was a good session for risk (red largely dominates the above grapple), but it was nowhere near the panic some had predicted, even though we have certainly not seen the end of it.