The tightening trend for leveraged debt markets seen since the start of 2023, has accelerated in the first week of February. After starting the year at around 470 bps, on Thursday the Traxx Crossover surged through the 400 bps barrier to around 380 bps at time of going to press.

Central banks are taming their hike rate lust, thanks to better than expected Q4 economic and more benign inflation data. This has spurred the market into thinking that any recession, if at all, won’t be as bad as expected.