The ECB undershot on expectations as the deposit rate was only cut by 10bps and the monthly volume of QE purchases was not expanded. Positively, the QE programme was broadened and the ECB extended it to March 2017.
Strong payroll figures support the market's view that the Federal will raise its policy rate by 25bp in its next meeting on 16 December.
European credit indices initially moved wider on the ECB disappointment, but then recovered, with current levels broadly unchanged compared to one week ago.
Several Nordic issuers were active in the primary market including Norwegian Air Shuttle,Topdanmark Forsikring, Eika Forsikring and ISS.
Commodity prices continue to plunge with a further drop in the oil price. A new S&P report highlights the mounting pressure facing the Norwegian high-yield market in view of the low oil price. Expect rising defaults in the energy and metals and mining sectors in the coming year.
This week we have initiated a new high yield trade idea: Buy Norwegian Air Shuttle EUR2019s outright.
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