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Consumers Feel The Pain

14 August 2014 by HCM

Today’s session was broadly a continuation of what we have seen since the beginning of the week. A general trend lower as far as risk premia are concerned as some of the hedges put in place since the start of the month are coming off. But trading is mainly taking place on indices and single name CDS are still experiencing a typically poor summer liquidity. Most of the credits are indicated tighter by sympathy with indices, but some protections appear to be stubbornly bid. Some risks need to be recycled in the consumer sector in particular and protection on MRWLN (Safeway Limited) or SUEDZU ( Suedzucker Mannheim Ochsenfurt AG) are quite difficult to buy. And when a piece news hit the tape, CDS gap very easily. For instance, ELTLX ( AB Electrolux) closed the day 15bps wider after the company confirmed it is in talks to buy GE appliances business.