The credit market's mixed bag

FIXED INCOME

Bryn Jones, head of fixed income at Rathbone Investment Management, gives an overview of recent trends in the credit market.

Credit indices are posting new highs, cash bonds are tighter still; emerging market spreads are grinding in; and peripheral debt is receiving upgrades. Remember that altitude sickness typically starts at 7,000ft above sea level. Well, at the time of writing, the FTSE closed at 6,865. The oxygen is definitely getting thinner, but investors are persisting. In February, $9.5bn of corporate bond deals were printed in just one day. Pension fund demand for bonds is also advancing, especially if equity markets get another leg-up and pension funds climb into surplus. And while GDP sits somewh...