Expect buyers to return after recent credit weakness: Jones

COMMENT

Recent weakness in credit markets has been less about panic selling from real money and more about a liquidity squeeze.

In the second quarter, we are seeing a significant cash-build in the market. The structure of the European and UK credit markets means redemptions and coupon payments are heaviest during these months. Indeed, a combined €32bn (£27bn) is estimated to be returned to investors between April and June. However, this high cash weighting has been met with a very low level of issuance in the markets, as corporates and financials continue to deleverage. Greater volatility, largely concentrated on the spreads of banks and driven by worries about sovereign defaults, has also led to cash sitting on ...