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The Week That Was

15 July 2016 by lberuti

Volumes stood well below their average today, particularly in Europe where people were probably still in shock after the terror attack that took place overnight in Nice in the South of France. It was a calmer end to a tumultuous week, which saw risky assets post an impressive performance across the board. Risk premia are tight in synthetic products. Except for iTraxx Financials which still have some ground to cover, credit indices are flirting with their tightest levels of the year. Levels are tight, but the move is driven by cash products, for which buying continues while primary deals are drying out. Without any primary supply in sight, even if one might expect the tightening trend to abate somewhat, one should not expect any blow out amidst the presence of CSPP. In any case, if the ECB action was not enough, it looks as if the BOE stands ready to act at it next meeting in three-week time.