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Indices Are Moving On Their Own

14 July 2014 by HCM

Today was fairly slow in the credit space. The beginning of the reporting season has failed to grab people’s attention so far, and the only meaningful activity on single names was again to be found in the Banco Espirito complex. The group now has a new management in place, but roughly €900mln issued by Rio Forte are coming due tomorrow. There were clearly some portfolio adjustments made during the session before this deadline, and BESPL senior and sub, both on the CDS and bond side, were trading much weaker. But the woes surrounding the Portuguese banking group did not seem to really impair risk sentiment. Most investment grade credits were actually unchanged with very little volume going through, leaving the index fair values almost flat on the day. And indices even enjoyed a bullish session, as some hedges bought last week were unwound. That meant index bases to their theoretical values closed much closer to home across the board.