Year starts strongly for credit traders but risks loom
The credit markets enjoyed a rare period of serenity as 2011 began, but few participants expect volatility to stay away for long
The credit markets have started the new year on the front foot, after a strong finish to 2010. Nevertheless, European sovereign and banking concerns are continuing to tug at the market, and there are also lurking worries over recent rises in government bond yields, which point to a possible correction waiting to strike.
“Ideally one wants to be running long credit. Fundamentally and technically the backdrop is constructive,” says Simon Thorp, head of fixed income at Liontrust in London. “However
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