Economic concerns keep credit trading activity flat

Trading activity remains largely stalled, with dealers shrinking away from risk taking and the buy-side digging in on the sidelines. Although credit staged several rallies in June, money market stress, looming government bond auctions in Spain and fears over economic growth painted a frightening backdrop. In Europe, at least, the brief rallies that took place seem to have been largely optical.

In the cash bond market, in particular, dealers say the tap remains all but turned off in terms of