Bank bonds bounce as market welcomes Covid-19 stimulus

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By David Freitas
11 Mar 2020

Spreads on financial institutions bonds are recovering from a brutal sell-off at the beginning of the week, as European governments and central banks weigh in to help economies deal with the Covid-19 coronavirus outbreak.

Credit default swap spreads for European senior and subordinated bonds tightened by 8bp and 21bp respectively on Wednesday, according to Markit data, signalling an improvement in sentiment overnight.

The moves followed a positive momentum in the US market a day earlier, with markets bouncing back after a heavy sell-off ...

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