The bank, however, did note that particularly high-yield credit spreads reverted to record lows in some markets. The tight credit spread environment in high yield has persisted, despite the US subprime woes and investor concerns.
As the report was released, the credit markets suffered another selloff in the bond markets, which caused the spreads on the European iTraxx investment grade index of the 125 most traded credit default swap names to trade 30 basis points wider at one point on Friday last week. By late afternoon today, those spreads had tightened by around 15bp by close of trading.
Today’s trading has been pretty quiet, but stabilised at the 203/204bp level, 15bp wider than last Wednesday according to one London-based trader.