European Credit Rally Erodes Negative Correlation to DAX: Chart

A rally in European corporate bonds has erased the negative correlation between yields and Germany’s benchmark DAX Index. Bloomberg Barclays corporate indexes show the spread between investment-grade and high-yield debt narrowed 13 percent in the past month, while the DAX rose 2.1 percent. The discrepancy sent the 30-day correlation between the two to almost zero from -0.9 in July.

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