PrefBlog

There’s some interesting speculation about credit spreads:

Executives who run big companies and big funds expect to be dealing with sovereign debt problems for years to come.

That’s one of the big conclusions from a survey of executives commissioned by Royal Bank of Canada’s capital markets unit.

Some of the most striking findings were a high degree of concern that a Group of Twenty country would default in the coming three years (Italy was voted most likely), skepticism that the euro-zone would survive that period intact, and a belief that high quality corporate bonds might be safer than some government bonds.

A full 40 per cent of respondents said that they expected yields on the highest level of corporate debt to drop below yields on sovereign debt of the countries where they are based, according to the poll of about 440 executives around the world.

Geez … you mean we have to re-write the textbooks again? We haven’t even finished rewriting the sections on monetary policy!

A good day in the Canadian preferred share market, with PerpetualDiscounts up 32bp and FixedResets gaining 7bp, with good volume.

This entry was posted on Tuesday, July 6th, 2010 at 7:50 pm and is filed under Market Action. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.