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Consolidation

14 March 2016 by lberuti

The velocity of the moves in credit during the last couple of days of last week was nothing short of astonishing. And it seemed for a moment when the European markets opened this morning that the momentum could carry into today’s session. iTraxx Main (ITXEB) traded as tight as 66bps and iTraxx Crossover (ITXEX) as tight as 298bps. But that move was actually short lived as soon buyers of protection emerged in the market, and the whole day was spent consolidating part of the trends seen Thursday and Friday. Credit closed wider across the board, underperforming equities which were flat to modestly up in all regions. While it had been the main beneficiary of the ECB’s action, ITXEB underperformed ITXEX (the latter widened by 6bps when a 17bps would have been expected based on ITXEB variation alone) and CDXIG in the US.