Key Theme in Corporate Credit Risk Is That There Isn’t One: Ballard

Corporate event risk has recently been on the rise, but the diversified and idiosyncratic nature of each case suggests that any future scares will remain difficult to foresee and even more difficult to pre-emptively hedge against, writes Bloomberg strategist Simon Ballard.

The lack of any apparent common thread between recent troubles for Deutsche Bank AG, Glencore Plc and Volkswagen AG may undermine risk appetite and in turn add further weight to the credit market's already evident defensive bias. Investors may even begin to question the sustainability of improved risk appetite after last week’s U.S. non-farm payroll data pushed further away the prospect of a U.S. rate increase.