Bonds
Bond Trading Frenzy Risks Giving Market Makers a False Sense of Security
- September was biggest corporate bond trading month on record
- Liquidity could quickly dry up if global markets gyrate
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On the surface, the corporate bond market has never looked more stable and liquid. In the US, the market recorded its busiest month ever for trading volume in September.
But history suggests that the ability to trade smoothly is only there until you need it, and the International Monetary Fund warned this week that tight spreads are raising the risk of an abrupt repricing of credit.