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.

For example, the cost of five-year protection on Philips Electronics tightened by 5-7 basis points, to 75bp, after it surprised the markets today by announcing a €9 million first-quarter profit. The statement by the Dutch consumer electronics group, which made a record loss last year, gave the technology sector a welcome boost.

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

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to View our subscription options

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here