Borrowing costs hit issuance, what is the effect on trading?

Published on 6 June 2022

Winifred Cisar Stieglitz, global head of strategy at CreditSights explains there are two trends in issuance across investment grade and high yield bond issuance in 2022. Not only is central bank activity through tighter monetary policy, triggering elevated volatility, there is an additional effect on investor appetite.

For buy-side traders, this not only translates into management of new issues, potentially through competitive pressure but limited secondary market activity as they sit tight on portfolios. Major outflows in many asset classes will also create limited supply for the foreseeable future.