Europe/US high yield gap re-opens with roll, but raises fair value questions
The semi-annual roll of US high yield index CDX HY has once again put daylight between it and European counterpart iTraxx Europe. But the new series has come in tighter than some market participants had anticipated

European high yield converges on US as credit pushes wider
A worrisome week is ending with spreads pushing to new local wides and underperformance of European high yield versus US credit

Spreads gap wider as slowdown fears sink in
Concern over the gathering coronavirus second wave, economic slowdown and the need for further central bank interventions has pushed credit spreads sharply wider, with yesterday’s US late session downturn spilling over to Asia and Europe

Curves steepen as roll shifts risk from the front end
CDS index curves have steepened with the September roll, with the reformulation of iTraxx and European portfolios having a noticeable impact on the front end of the curve

Index roll brings sea change for US/Europe relative value
The roll of CDS indices to new series has shifted relative value measures between Europe and the US, with CDX indices trading in a tighter context to their new iTraxx counterparts

Fallen angels and financials feel heat as CDS indices roll
CDS indices are rolling into new contracts today, with outgoing series of iTraxx Europe and Crossover widening sharply from the market’s open on technical as well as fundamental factors

Credit retreats from tights as central banks offer reality check
European credit is following Asia wider today, picking up from where the US left off yesterday as the Federal Reserve vowed to keep overnight rates near zero for the coming years

Cautious open sets credit at odds with equity
A positive open to the week for European stock markets is not reflected in cautious credit trading, with spreads generally flat to slightly wider

Credit spreads see-saw as US tech slump puts market in reverse
A sharp about-face in sentiment, driven in part by US tech sector weakness, has put credit markets back to more or less where they began the week - having hit new post-covid tights in between

HY rallies as curve steepening picks up
Credit spreads may have normalised since the March/April peaks of the coronavirus sell-off, but relative value investors are still finding a wide array of trading dislocations beneath the headline numbers

Financial CDS move points to relative value boost
The credit derivatives market could take an important step towards greater versatility with the 21 September roll, as participants again consider whether to begin including financial names in the CDX IG investment grade index

Credit hedge funds (September 2020)
Monthly credit hedge fund tables

Ucits at a glance: Five funds lift YTD returns above 5%
Five funds have managed to pull their year to date figures above 5%; Loomis Sayles (7.50%), Algebris (5.82%), Pictet (5.53%), Amundi (5.36%) and Advent (5.11%)

Credit funds at a glance (September 2020)
A round-up of fundraising and people moves

Fund performance: Almost a third of credit funds reach positive YTD returns
July has been a successful month for many credit funds, despite the recovery peaking in May and June

CLO funds top rankings, but still have ground to make up
CLOs may have taken a hammering in March but, for the fourth consecutive month, funds that invest in these assets dominate our ranking of the top performing credit funds

Push tighter takes credit indices back to pre-March levels
Credit markets are hitting new tights this week, with European spreads today following the example set by the US on Monday

Credit fundraising: distressed keeps in favour but CLO ETFs emerge
Five months into global lockdown and distressed debt funds are still proving popular, but several managers have found success pitching other types of credit strategies

US financial CDS basket plans dropped for September
Plans to develop trading of US financial CDS have hit a second set-back, after several CDX IG committee members said they are not ready to begin including these in the index at the September roll

Credit hits new tights as US covid treatment fuels hope
Credit markets are starting the week on a strong tone much as they traded on Friday, as optimism for a US approved coronavirus treatment and the Federal Reserve's Jackson Hole virtual meeting on Thursday outweighed concern about rising European covid-19 cases

High yield inflows return as appetite moves to long end
A heavy slant in preference for investment grade credit has been underscored by high grade funds recording their 20th week of inflows in a row, but high yield funds are also back to positive flow for the first time in three weeks on returning European appetite

Changes in scope for CDS indices and tranches ahead of roll
Structural changes look to be afoot globally for CDS indices and tranches ahead of the September roll, with IHS Markit weighing amendments to products in all three traded regions

Sharp moves for single name bonds and CDS, as indices open with caution
Credit has begun the week looking for direction with European CDS indices slightly wider, US counterparts edging tighter, and high yield bonds making sharper moves in either direction

Europe's grind puts IG decompression trades in scope
The gap between US and European investment grade CDS indices has doubled this week from the tight end of its recent range, positing a possible entry point for compression trades

Fund performance: Credit funds post double-digit gains
June returns have once again been led by CLO funds, as seven out of the top 10 belong to our CLOs category.