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Weak and Slow, But Mainly Slow

16 May 2016 by lberuti

As expected today’s session was very quiet with most of Europe out. Volumes were light but the tone was cautious across the board and while US indices were unchanged at the European close, every member of the iTraxx family (Main, Financial Senior and Subordinated, and Crossover) saw their risk premia increase. Their fair values were also wider. The weakness was led by UK retailers – MKS ( Marks and Spencer Group Plc ) +3bps @ 151bps, NTX ( Next Plc ) +2.5bps @ 110, MRWLN (Wm. Morrisson Supermarkets Plc) +8.5bps @ 132bps -, as Brexit weights on investors’ mind, and EDF (+7.5bps @ 95bps) which got downgraded by S&P by 2 notches to BBB. The company was removed from credit watch, but the outlook is still negative and another notch will be cut if EDF goes ahead with Hinkley Point.