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US high-yield credit markets have experienced a notable tightening of spreads in recent weeks, reflecting growing investor optimism. Since April 7, high-yield spreads have narrowed by approximately 152 basis points, reaching around 309 basis points above Treasuries. This marks a return to levels last seen before April 2, indicating a diminished perception of credit risk despite earlier recession concerns. The market has seen five consecutive days of gains, with BB-rated bonds at 178 basis points and B-rated bonds at 286 basis points spreads. May issuance has been robust, exceeding $100 billion month-to-date, outpacing April's weak totals. Overall, credit markets have remained calm and have not priced in a recession or widespread defaults, contrasting with some earlier market fears.
Credit markets continue to calm and quite quickly, with spreads well off their recent peak. In early April when a recession was all the talk, the credit markets simply never bought into it, as spreads were well beneath 2022 levels. This was one positive we noted many times. https://t.co/b1wS31BtYW
"During a huge risk-on advance, US High yield spreads have tightened 152 bps since April 7. With spreads now at 309 bps above Treasuries, credit market investors are back to pricing in a very optimistic outlook with no recession and few defaults." @charliebilello https://t.co/mbGlVRJnQd
During a huge risk-on advance, US High yield spreads have tightened 152 bps since April 7. With spreads now at 309 bps above Treasuries, credit market investors are back to pricing in a very optimistic outlook with no recession and few defaults. https://t.co/aQIM8v6Ws2
