Liquidity conditions in the corporate bond market remain healthy despite the typical seasonal slowdown.

Despite increased market volatility in 2022, the investment grade credit market is healthy and functioning. Secondary trading volumes have been fairly normal so far this year, with the average daily trading volumes at $21.6 billion compared to $20.2 billion for the average of the last five years through July. Even after adjusting for the growth of the corporate bond market, trading volumes in 2022 are only slightly below the average for the prior five years. This indicates that the dealer...

Yield-curve flattening and the credit sell-off have created value opportunities.

As the market prices in rate hikes on the back of a more aggressive Federal Reserve, we’ve seen the front end of the Treasury curve reprice higher with the flattening of the overall yield curve. The two-year/10-year Treasury yield curve has flattened approximately 50 basis points year-to-date and the five-year/10-year Treasury curve has flattened about 25bps and now sits in negative territory. This flattening, together with the sell-off in credit spreads, has created opportunities at the front end of the corporate ...