Credit Market Opportunities Seen After Ugly Selloff

The wider spreads in corporate credit markets that have opened up this week may eventually prove irresistible to fixed-income investors, who still see corporate bonds as the yield-enhancing asset class of choice, Bloomberg strategist Simon Ballard writes.

While investor sentiment remains fragile after Monday's incredibly ugly selloff, underlying fundamentals are generally stable and further fallout may be limited by seasonal considerations. With many traders and portfolio managers away on vacation, corporate bond trading volumes, new issue activity and generic liquidity remain muted for now.