G7 summit and July 9 tariff deadline may spark market volatility
The post G7 summit and July 9 tariff deadline may spark market volatility appeared on BitcoinEthereumNews.com. Credit investors are avoiding big bets as worries over U.S. trade policy keep markets stalled, driving credit volatility to near-record lows. A gauge that tracks price swings in North American credit-default swaps plunged by almost 75% last week, bringing it close to its weakest reading ever. At the same time, a similar index for European investment-grade companies fell to its lowest since mid-2021. Moreover, moves in corporate bond spreads have all but disappeared. Bloomberg reported that Money managers are playing it safe and won’t take on more risk or bet on another drop until U.S. tariff plans become clearer. After surging in April, risk premiums eased when the White House cooled down on possible trade barriers. “Spreads can remain rangebound until there is a resolution,” said Jamie Newton, head of global fixed-income research at Allspring Global Investments. Instead, he’s focused on what he calls “coupon-plus” returns, or the yield earned simply by holding bonds. Volatility has fallen so far that both corporate bonds and the contracts that insure them barely budged, even when news that usually shakes up markets came out. Last week, President Donald Trump posted on social media about the challenges of striking a deal with China’s Xi Jinping, only for the two leaders to speak by phone days later. On the other hand, U.S. services activity and private-sector payroll numbers came in weaker than expected, raising fears that slower growth could undermine companies’ ability to service debt. Global corporate bond spreads are now back to where they were before Donald Trump’s early-April “Liberation Day” announcements. G7 summit and July 9 tariff deadline may spark market volatility So far, people remain confident in credit markets even though conditions are tighter. “There’s no fundamental reason for a big credit sell-off,” said Alexandra Ralph, senior fund manager at Nedgroup Investments.…
The post G7 summit and July 9 tariff deadline may spark market volatility appeared on BitcoinEthereumNews.com.
Credit investors are avoiding big bets as worries over U.S. trade policy keep markets stalled, driving credit volatility to near-record lows. A gauge that tracks price swings in North American credit-default swaps plunged by almost 75% last week, bringing it close to its weakest reading ever. At the same time, a similar index for European investment-grade companies fell to its lowest since mid-2021. Moreover, moves in corporate bond spreads have all but disappeared. Bloomberg reported that Money managers are playing it safe and won’t take on more risk or bet on another drop until U.S. tariff plans become clearer. After surging in April, risk premiums eased when the White House cooled down on possible trade barriers. “Spreads can remain rangebound until there is a resolution,” said Jamie Newton, head of global fixed-income research at Allspring Global Investments. Instead, he’s focused on what he calls “coupon-plus” returns, or the yield earned simply by holding bonds. Volatility has fallen so far that both corporate bonds and the contracts that insure them barely budged, even when news that usually shakes up markets came out. Last week, President Donald Trump posted on social media about the challenges of striking a deal with China’s Xi Jinping, only for the two leaders to speak by phone days later. On the other hand, U.S. services activity and private-sector payroll numbers came in weaker than expected, raising fears that slower growth could undermine companies’ ability to service debt. Global corporate bond spreads are now back to where they were before Donald Trump’s early-April “Liberation Day” announcements. G7 summit and July 9 tariff deadline may spark market volatility So far, people remain confident in credit markets even though conditions are tighter. “There’s no fundamental reason for a big credit sell-off,” said Alexandra Ralph, senior fund manager at Nedgroup Investments.…
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