Credit Markets Update: Spreads narrow as outlook turns positive
US Federal Reserve Chairman Alan Greenspan’s testimony before Congress today indicated that the Fed does not plan to raise interest rates any time soon and this, along with signs that the US economy is strengthening, caused spreads in the credit derivatives market to tighten. A range of industries including technology, automotive and telecoms benefited from the increasingly positive sentiment and from good news from bellwether credits.
The cost of protection on General Motors narrowed 10-15bp, with bid/offers at 120-125bp, after it posted a healthy $467 million first-quarter profit on Tuesday and raised
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