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Action at last!

21 March 2017 by lberuti

It looks as if everyone tuned it to watch the French presidential debate yesterday night and decided that Mr Macron – moderate candidate - put a decent enough performance that comforted them in the belief he will crush Mrs Le Pen – far right candidate - if the pair were to face each other in the decisive second round of the election. Everybody seemed to cheer, and the credit market squeezed pretty hard in the morning – iTraxx Main (ITXEB) was a couple of bps tighter at 74bps and iTraxx Crossover 8bps tighter at 287bps -. But the sentiment switched in the afternoon as it surfaced that Mr Trump’s healthcare bill could potentially not pass Congress. All of a sudden, investors seemed to question his ability to get the planned tax cuts through and the whole reflation trade appeared to fade in the second part of the afternoon. Credit indices went back very quickly to unchanged levels on the day. At the end of the session, the only sign of the intraday volatility was the bases which all closed more positive, as the speed of the move left single names behind.