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A Month For Nothing?

26 February 2016 by lberuti

Buyers of protection were nowhere to be seen today and it felt like a replay of yesterday’s price action on steroids. It looks as if investors do not want to hold large short risk positions going into the G20 meeting this week-end nor into the ECB meeting next month. The days where iTraxx Main and iTraxx Crossover traded above 127 and 490 respectively seem a distant memory. Even iTraxx Financials has regained some strength. The catalyst of the short covering in that space seemed to have been the results of LLOYDS yesterday, which put an end to the recent miserable string of earnings among financials. The credit market is trading at multi-week tights and recouped almost all its losses since the beginning of the month. Are all our troubles over?