The year of the credit hedge fund
The credit markets experienced a New Year jolt that was as violent as it was unexplained. In a matter of days, European investment-grade credit spreads widened by 20% from the tights reached in the second week of January, before finding stability at the end of the month.
For as long as anyone can remember, credit traders have bought bonds in December to participate in the traditional ‘January rally’. Despite strong new issuance, investors tend to invest money