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Series 29 Is Not The Only One

18 June 2018 by lberuti

A new week started with a new round of things to worry. iTraxx Main (ITXEB) and iTraxx Crossover (ITXEX) were pushed 2bps wider at 68bps and 4bps wider at 299bps at the close respectively, even though they finished the day slightly off their widest levels. In Europe, investors are worried about a potential breakdown within Mrs Merkel’s coalition with the CSU around immigration policies. She bought some time after she accepted a 2-week deadline which allows her to kick the can down the road a bit. Nevertheless, the remote possibility of this kicking off reintroduced an element of “European tail” in the equation. Also, everybody is waiting for the next blow in the US-China trade war. Options probably played their part in keeping the market in check, as the next expiry is due on Wednesday. Not because of any major pin in sight on ITXEB or ITXEX series 29, but rather because of positions on ITXEB series 28 with a 60 strike which triggered some rehedging as soon as this level was broken.