17 July 2015 by lberuti
The market has been strong all week, and today was no exception. There was a bit of volatility during the session when some residual hedges were unwound and iTraxx Main touched 59bps while iTraxx Crossover touched 260bps. But these moves were made in fairly low volumes and the closing levels mainly show some decompression driven by the outperformance of the Financial subset. On their side, single name CDS were remarked tighter across the board, but that happened without hardly any trading activity. Dealers were extremely defensive when it came to buying protection, after a week of one way traffic regarding flows it has to be said as most clients were looking for bids in CDS. The appetite for risk (be it long risk or short risk) is fading fast and market makers expect more difficulties to recycle positions as we are entering the heat of the summer.