24 May 2016 by lberuti
Since the beginning of May, iTraxx Main (ITXEB) had been stuck in a 76-80bps range. After a strong session with the rally in stocks obviously the catalyst for some hedges to come off, credit indices finally closed through their May tights. As is usually the case during aggressive moves, indices reacted faster than their constituents, which saw their risk prima tightened only half as fast. That sent index bases to the lower end of their recent range, and made people take that move with a pinch of salt. With some action packed weeks ahead of us (Payrolls statistics in the US, details of the CSPP during the ECB meeting, Spanish elections and UK referendum), investors will want to see some follow-up among single name CDS to consider it is not just a flash in the pan that deserves to be faded.