Drilling deeper into the credit and equity de-coupling There has been a sharp differentiation in equity and credit market performance since the end of January, even as credit has rallied slightly over the past couple of days. We have drilled down into the performance of the two asset classes to determine whether the disconnect at the index level is driven by differences at the sector or single-stock level, or whether it is more broad based. Some sectors more disconnected than others Overall, moves in credit and equity market at the sector level have been largely uncorrelated over the past month. The largest disconnects between credit and equity markets seem most apparent in cyclical areas of the market such as Oil & Gas, Basic Resources and Capital Goods where spreads have widened significantly and equity prices have risen. And it's not just an index effect Much has been said of the technical drivers of the recent sell-off and the forced selling of the iTraxx Main index. While widening has been more pronounced for those companies that are in the iTraxx Main Index, indicating technical factors are having an effect, spreads have also widened substantially for IG companies not in the index. Drilling down further to the firm level We have screened the market for where there has been a large degree of de-coupling and there is downside to equity prices based on our analystsâ price targets.
Hi Guys, How often do you see DAX spread of 3 ticks? I see it at least 10 times during each hour, it is more often, but let's say 10 times. It stays like this for very short period, but it is there. I was recently told, that such spread should not exibit on DAX, but is is there on 3 different independant feeds that I have? Thanks, redduke