Pershing Fixed Income Market Commentary


While it was an eventful week for Greece and European leaders, it was generally uneventful for the markets. Whether we have all become experts on Hellenic law, or we have simply spent the past two years mentally agonizing over every possible default scenario, the markets were generally unfazed by S&P lowering Greek debt to selective default (SD), the ISDA ruling that a CDS event has not yet occurred, another €500 billion being lent from the LTRO, and Portuguese yields widening again as restructuring concerns swirl around the Iberian nation. To be sure, the market has taken its cues from improving economic releases and better market sentiment, as several indicators have returned to pre-crisis levels. Risk assets in the fixed income markets have had a strong run, with HY gaining over 5%, emerging markets between 4%-6%, and preferred approaching double digit levels, all on a compressed year-to-date basis. There is a dearth of economic releases next week, although it is hoped that the always important jobs report on Friday will provide confirmation of last month’s strong gains. Read the full commentary now.

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