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It’s Not Trade War Or A Market Drop That Is Keeping Credit Investors Up At Night

It’s Not Trade War Or A Market Drop That Is Keeping Credit Investors Up At Night

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Fast forward to today, when in the latest survey of European credit investors conducted by BofA’s Barnaby Martin, the strategist observes that concerns about the market’s ever shrinking liquidity have become the primary source of worry for professional investors, and as Martin writes, “it’s not trade wars or an equity market correction that look to be keeping credit investors up at night.” Instead, it is the fear of a “pervasive rush for the exit at some point in the future.”

 

In other words, what is keeping bond traders up at night is the fear that when the selling begins, there will simply not be enough liquidity to absorb it all.

 

What is just as surprising, is that just last month the top investor concern was “Bubbles in Credit”, i.e. excess liquidity, which one month later has now morphed into “Liquidity Vanishing”, which according to Bank of America is the first time in 3 years that this has emerged as the chief concern.

Source: It’s Not Trade War Or A Market Drop That Is Keeping Credit Investors Up At Night