The global credits space continued to see heaviness, as the US-Iran conflict dragged on. Except for a small reprieve last Wednesday, the past week generally saw market players reducing risk. The hawkish comments from Federal Reserve Chair Jerome Powell after the Federal Open Market Committee (FOMC) meeting held policy rates did not help with investor sentiment.

Currently, market players are seeing a further widening of credit spreads, with the small number of bids being very defensive. Credit default spread levels are anywhere from 12 to 25 basis points (bps) wider week-on-week. Meanwhile, bond spreads are 15 to 30 bps wider in general.

The global credits trading desk still has not seen significant buying come in levels that are near the highest (in absolute yield terms) and widest (in spread terms) for the year so far. This implies that the market would rather wait for the uncertainty caused by the US-Iran conflict to subside before coming in.

• The US Producer Price Index for the month of February was higher at 0.7%, seasonally adjusted, compared to 0.3% in a Bloomberg Survey.
• The US Federal Reserve kept rates unchanged at 3.50% to 3.75% as expected.
• The US Unemployment Claims for the week ending March 14 was lower than expected at 205,000 versus 215,000 in a Bloomberg Survey.