December is a strong month for bonds. This year is no exception, with around £25bn of coupon flow, a...
December is a strong month for bonds. This year is no exception, with around £25bn of coupon flow, and redemptions from credit and gilts looking for a home. However this year it has been matched by meagre supply. During fourth quarter supply excluding sovereign issuance, has been around £6bn, with little in the pipeline to suggest a pick-up in December. With such an obvious imbalance in credit in the short term, the path of least resistance for credit spreads is inevitably tighter. Valuations are at extremely tight levels, close to five-year lows, with break even spreads allowing little...
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