US Corporate bond spreads continue to widen

Matthew Wright

Livewire Markets

Spreads are on the move in the bond market, especially for lower credit bonds. The spread between the Bank Of America/Merrill Lynch US High Yield index and 10-year treasuries has widened out to 623 basis points which is the largest spread since June 2012. It’s not just junk bonds that are making multi-year highs in spreads, however. The spread between BAA and 10-year treasuries is the widest since July 2012 and the spread between BAA and junk is the widest since September 2012. The recent widening between junk yields and 10-year treasury yields has mirrored the decline in breakeven inflation expectations. On 9/29, 10-year TIPS implied breakeven inflation expectations made a six-year low at just 139 basis points. Click the (VIEW LINK) for more charts


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Market Analyst
Livewire Markets

Matt has over 10 years’ experience in financial markets and is currently a successful Proprietary Trader with Epoch, trading interest rate and equity derivatives. Matt managed relative value interest rate books for large SFE locals in his early...

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