Credit comment: Volatility in rates stepped up a few notches

Credit comment: Volatility in rates stepped up a few notches as a Greek deal tetered between German-mandated further austerity requirement and Greek demands for relief; we saw more mud-slinging from both sides with little clarity. After widening most of the time during the rate backup, credit decided to draw its line in the sand and make some wary gains (IG is probably 4-5 bps better). The story is still gory in credit overall; outflows in HY in recent weeks from flighty ETF money have severely dented the YTD inflow numbers. The M&A deals continue to gain favor; and look enticing, especially to the acquirers on the IG side as low rates continue to permit such combinations; Today, we saw ETP wooing Williams to prepare for a backlog in pipelines. With the new plateaus set by oil, Energy should continue to see this activity as players jockey to position themselves for the new normal (if they have access to the capital markets, that is.

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