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Credit Insights

The Song Remains the Same

With continued bond fund inflows, little new issuance, and low dealer inventories, traders are scrounging to source bonds.

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The average credit spread in the Morningstar Corporate Bond Index tightened 3 basis points last week to +144. Since the beginning of June, credit spreads have steadily tightened about 4 basis points a week, with very little variability.

Last week, after lagging the tightening in the financial sector, the industrial sector finally outpaced the financials and tightened 4 basis points compared with the financials, which were largely unchanged.

David Sekera does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.