CREDIT DAYBOOK AMERICAS: IG Spreads Rally to Tightest Since 1998

US investment-grade bond spreads rallied to a fresh low going back to 1998, driven by a confluence of Donald Trump’s election victory and technical tailwinds.

• Average high-grade bond spreads narrowed 2 basis points to +75 at Thursday’s close, the tightest level since May 1998, according to data compiled by Bloomberg
  • The end of election uncertainty, higher rates combined with decreased swings in bond yields, a slowdown in issuance and a rally in stocks are all bullish for high-grade spreads, according to Bank of America
  • Barclays analysts Bradley Rogoff and Dominique Toublansay higher all-in yields “should continue to draw investors ...