Overall, the credit market saw some softness last week. iTraxx Main widened 5bp to a level of 78bp at the deadline for this publication yesterday, while Itraxx Crossover widened 15bp closing at 327bp.
Most notable macro events last week were the publication of US job reports and activity surveys. As indicated by both the ADP jobs report and ISM/Markit PMI surveys, only 160,000 new US jobs were added in April. This was lower than expected and the weakest job growth in seven months. The slowdown in employment growth comes after weak GDP growth in Q1 implying that an (earlier) possible US interest rate hike in June now may be off the table. This could moderately support credit spreads over the short term.
We saw activity in the primary Scandi Investment Grade credit market, where Danske Bank, Tele2 and Länsforsakringar Bank were among the issuers. We did not see any new Scandi High Yield transactions. We expect more new Scandi issuance over the coming week.
The Scandi reporting season is well underway and we saw credit neutral to credit positive reports from the Investment Grade companies reporting last week. The trend for the Scandi High Yield companies was more mixed as can be seen under the news sections in this publication.
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