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Corporate Credit Update: Risk Gaps Higher

US

Investment-grade corporate credit risk gaps higher - back near late June's two year highs as sell-off in stocks continue. Recent headlines from ECBs Lagarde on inflation: "much higher, persistent than anticipated" and of course "expecting to raise rates further" are weighing on risk assets, SPX eminis trade -67 (-1.71%) at 3850; DJIA -510.14 (-1.64%) at 30509.87; Nasdaq -171.6 (-1.5%) at 11363.12.

  • Investment grade risk measured by Markit's CDXIG5 index is currently +12.335 at 99.133; CDXHY5 high yield index at 98.859 (-0.650).
  • Outperforming credit sectors (tighter or least wide): Industrials +1.5, Utilities +1.6 and Consumer Staples +1.7
  • Lagging sectors (wider or least narrow): Materials, Energy and Communications all clustered around +2.5.

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