FXstreet

The average bid of high-yield flow-name bonds rocketed 272 bps in today’s reading, to 101.33% of par, yielding 6.74%, from 98.61, yielding 7.86%, on Oct. 16, according to LCD. All 15 of the constituents notched big gains, with none less than one full point and many in the two-to-four-point context.

In a snapback rally from the depths of October’s nosedive, the average posted its single largest gain in roughly three years, or since a gain of 332 bps for the observation of Sept. 29, 2011. At that time, for reference, the average moved to 91.25 from 87.93.



Yield plunged 112 bps in today’s reading, for the largest downside move in 5.5 years, or since 135 bps for the reading for May 7, 2009. At that time, yield fell to 13.83% from 15.18%, as the price jumped to 81.8 from 79.1.

Today’s historic move is noted against the backdrop of robust market tone in a fourth consecutive session after the recent plunge. Just as there were moments of deep price discovery last week, with huge gaps lower as the market looked for a floor, there have been gaps higher in recent days. Neither dynamic has been seen for years. The upside momentum started Thursday afternoon and pushed hard into Friday, with many core credits up 2-4 points and damaged names up 5-10 points.


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