Volatility puts credit investors on the defensive

Investors are gravitating towards safe haven sectors such as utilities and telecoms as credit fundamentals on non-cyclicals continue to deteriorate

Although non-financial corporate bonds have rebounded in recent months, the credit market remains in a state of high alert entering the second quarter. Systemic risk indicators have been tracking upwards and were hitting their peaks again in March, reflecting concern over continuing failures and bailouts among banks and insurers.

In the European market, the senior financials credit derivatives index was again trading in line with the main index, a sure sign of heightened angst. "Previously when