appetite-for-euro-paper-remains-low-despite-the-strong-currency

Appetite for euro paper remains low despite the strong currency

Aida Mosira Mokhtar, senior fixed-income portfolio manager at Petronas, talks to FinanceAsia about her views on the credit markets and explains why appetite for euro-denominated paper will remain low until liquidity returns to the system.
What signal would give you confidence that a certain amount of equilibrium had returned to the market
There are a few signals that indicate a certain amount of confidence has returned, namely a decrease in volatility, a slowdown in subprime-related write-downs, stability in corporate bonds and an increase in liquidity.
The recent spread widening across the curve is expected to retrace as the scale of subprime risk becomes much clearer. The re-pricing of credit risk should gradually allow the markets to remain calm and result in tightening spreads. Thus, the stability in the market can only happen if liquidity returns.

Has the drop in the dollar changed your appetite for euro-denominated paper
Most central banks...

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