15 June 2016 by lberuti
After a few torrid sessions, there was a bounce back in risky assets across the board and they staged a mini rally into the FOMC tonight. For most of the day, that benefitted credit as well. Credit indices stayed in a tight range and were hovering around the tights. But while profit takers had been consistently selling protection on single reference entities throughout the day - especially on UK banks -, buyers of protection on iTraxx Financial Senior emerged out of nowhere towards the close and pushed the whole iTraxx complex to new wides in Europe, denying almost all European credit indices a first positive close. That led to another day of underperformance of iTraxx Main (ITXEB) compared with CDX IG, its US equivalent. ITXEB now trades 3bps wider than CDX IG, when it was 6bps tighter 3 weeks ago.