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Corporate Credit Risk: Edging Higher Amid De-Risking Ahead NATO Conf

US

Corporate credit risk is see-sawing higher on the day, upper half of decent range as equities scale back week's support (SPX emini -47.0 at 4458.0 vs. 4513.75 overnight high). Investment grade risk measured by Markit's CDXIG5 index currently +1.582 to 71.293; CDXHY5 high yield index mildly lower at 105.475 (-.374).

  • Incidentally -- Tsy futures continue to march higher after trading weaker since Friday, 30YY down to 2.5235% from 2.6392% overnight (highest since Aug 2019).
  • Markets appear to be de-risking ahead Thu's NATO address by Pres Biden:
  • National Security Advisor Jake Sullivan: U.S. WILL UNVEIL NEW RUSSIA SANCTIONS: SULLIVAN - TARGET POLITICAL FIGURES, OLIGARCHS, ENTITIES, Bbg.
  • Outperforming credit sectors (tighter or least wide): Industrials (+1.3) with Caterpillar, Ryder System, John Deere and Burlington Northern default risk improved. Technology sector next best sector at +1.8 -- tech sector shares outperformed earlier in session.
  • Lagging sectors (wider or least narrow): Materials (-3.6) as BHP Billiton, Rio Tinto and Barrick debt continues to underperorming.

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