US jobs strength sends traders scrambling to cut Fed pivot trades
Credit spreads are ending the week on a sharp move wider, with a heavy sell off hitting financial markets in the wake of US jobs numbers that suggest any notions of a Fed pivot on rates are premature

"Ugly" eurozone inflation numbers cap off torrid week for credit
Credit spreads are heading tighter into the weekend, as investors rebalance positions against a backdrop of easing currency pressures but a challenging array of European inflation numbers and a highly charged Brazilian election month about to kick off

Investors nurse wounds after UK scuppers credit expectations
Financial markets are picking up the pieces on Thursday following an extremely volatile session ignited in large part by UK economic mishap, which sparked fears of a financial crisis and necessitated the central bank’s intervention

US-led sell off shifts index roll technicals with key rates decisions looming
Further deterioration in global economic outlook is causing credit spreads to move back to the midpoint or wide end of their recent range, after a week of reversal from the previously more optimistic September trading run

Euro credit hits new tights against US after months of underperformance
The gap between European and US credit has closed, with indices trading at their tightest relationship for several months, after US economic data introduced a fresh bout of volatility

Keep an eye on gaming, leisure and entertainment issuers in Euro CLOs, says BofA
CLO investors should be mindful of industry concentration exposure, with the gaming, leisure and entertainment sector an area of focus, according to Bank of America research released yesterday

Structured credit cited by 42% of investors looking for fixed income replacement, Aeon finds
Institutional investors are largely looking to reallocate away from the fixed income market amid the macro-environment of rising interest rates, inflation and poor returns, according to a survey by Aeon

Euro CLOs demonstrate "considerable resiliency" to upcoming CLO maturity wall, says S&P
Managers and investors should keep an eye on upcoming CLO maturity wall with “potential adverse effects” amid tighter financing conditions and the impact that could have on CLO performance and ratings

Down in the hole: investors hedge their bets ahead of pivotal Powell
Credit spreads are shifting wider on Friday, after an initial improvement, as investors try to balance positions ahead of what could be a pivotal speech by US Federal Reserve chairman Jerome Powell

Euro CLO IG mezz tranches look attractive amid cap stack divergence: Barclays
European CLO IG mezzanine debt tranches are more attractive than triple As or double Bs, say strategists at Barclays, owing to greater dispersion and a lag in recovery.

Widening asset/liability gulf will hurt CLOs: Barclays
A mismatch between CLO asset / liability rate risk is increasing in the US as more leveraged loan issuers opt for one-month pay frequency, Barclays credit strategists have found

Rising stars, decompression and trade unwinds set to drive September roll: Barclays
Decompression and US / Europe relative value trade unwinds look set to characterise the September CDS index roll, with the prospect of no changes to iTraxx Europe for the first time in recent memory, say Barclays credit strategists

Spreads gap wider with UK inflation adding to cocktail of concerns
Evidence of financial markets hitting a resistance point after three weeks of improvement is growing, with Monday’s bearish shift extending over into early trading Tuesday

Euro credit woes vs US set to resume with cyclicals shock likely: JP Morgan
Further decoupling lies ahead between euro and dollar credit, despite the recent positioning squeeze, warn JP Morgan credit strategists

Position cutting tames market rally and strategists warn on primary impact
Caution is the watchword across financial markets on Tuesday, with the strong recent run giving way to hedging and position cutting ahead of a much-anticipated US inflation reading on Wednesday

Short duration CLOs are putting reset risk in the post: Barclays
The CLO market’s recent trend of shorter duration issuance could be setting up a problem for managers down the line that will impact their equity returns, Barclays has warned

ECB acts on inflation but gas and other worries grow worse
If European Central Bank officials breathed a sigh of relief when their first hike in 11 years did not immediately rattle markets — or even dared believe a more hawkish signal helped confidence — the reprieve was short-lived

UBS says modelling suggests upcoming recession won’t bite
Likely global recession scenarios look mild according to strategists at UBS, who have run four models.

Relief rally extends despite US and EU sending mixed signals on recession
Growth and inflation data on Friday has added impetus for the European Central Bank to maintain a hawkish stance at its September meeting, despite US signals suggesting that economy is in recession

Italian rout gathers pace as credit relationships warp well beyond historical norms
Renewed selling pressure on Thursday has taken credit spreads back towards the year’s wides, with financial borrowers underperforming as Chinese covid cases, US inflation and a drought in Italy all weigh on sentiment

IG payers provide best tail-risk hedges: Barclays
Investors seeking the cheapest tail risk hedge should look to CDX IG payers, while iTraxx Europe payers are the best hedge against further European underperformance, finds Barclays

Go long duration in consumers and industrials: BofA
The year’s wides still lie ahead in the second half, but China reopening is bullish for consumer and industrial spreads and investors should extend duration in high-quality credit, according to Bank of America strategists

Euro loans with FX hedging offer better value than US: Barclays
The big underperformance of European loans in June has left them looking cheap versus those in the US – but FX hedging and a nuanced selection process are advisable for investors looking to take advantage of that

Euro double As and US triple As offer best value in CLOs: BNP Paribas
Secondary market double A rated tranches offer the best relative value in European CLOs’ capital structures, while US triple As in primary starting to look attractive, according to BNP Paribas credit strategists

CLO spreads are not pricing in recession: JP Morgan
CLOs are priced fairly for a growth slowdown but not a recession, according to JP Morgan credit strategists, who warn spreads are at risk if US growth contracts