ABS spreads widen after week of jarring macro shocks

markets slide
By Jennifer Kang
12 Aug 2019

Primary and secondary ABS spreads widened across the board last week, particularly for the prime and retail auto lease sectors. The volatility comes on the heels of a “paradigm shift” in the markets in response to trade war worries and a discouraging policy response from the Federal Reserve.

“Sentiment from numerous Bank of America Merrill Lynch strategists/economists turned notably negative [last] week,” according to a research report published by the bank on Monday. Though securitized products may be able to benefit from the lower rates, they “will not be immune from [a] broad risk-off move,” BAML ...

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