Junk Bond Traders Are Really Oil Traders Now as Markets Converge
Record-high correlation between non-energy junk bonds and oil
Investors may not be focusing enough on risks, BofA says
Cordell Eddings and Fion Li
The fortunes of junk-bond traders have never been more closely linked to oil.
The high-yield bond market has been rallying since Feb. 11, the exact day that oil reached a bottom. Prices on the bonds of speculative-grade energy companies are always linked to oil, but in recent weeks, credits outside that industry have also been moving with the commodity.