Cash bonds and CDS diverge

A reversal in the direction of credit spreads in mid-March has revealed an intriguing phenomenon in the European credit markets: the growing disconnect between cash bond and derivatives prices. Alan McNee investigates


The movement in cash markets in March led some observers to predict that credit markets are finally on the turn. Headlines such as “End of the party” and “Growing fears credit boom may implode” in the financial press suggested that the two-year bull run of credit may have come to a sudden end. Euro-denominated bonds widened by about three basis points in the week beginning March 7, with sterling spreads moving out by between five and 10 basis points.

A rapid rise in US Treasury yields

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