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The ECB Largesse

05 December 2013 by HCM

This grapple gives a representation of magnitude of the spread move compared with the absolute value of the spread. The size of the bubble depends on the CDS open position on the name and the color of the bubble depends on the average daily activity during the period.
In 2013, the move on European financials was uniformly tighter. On each name, the magnitude of this move was essentially a function of the absolute spread of the name. Tightening and compression were in play, without much discrimination. Lower interest rates benefited every single issuer, with the exception of STANLN (Standard Chartered) which felt the effect of the FED potential taper because of its exposure to Asia.