"In the beginning of the game ignore the search for combinations, abstain from violent moves, aim for small advantages, accumulate them, and only after having attained these ends search for the combination — and then with all the power of will and intellect, because then the combination must exist, however deeply hidden."

Whether you believe credit conditions have decisively turned a corner or are due to get tougher, it’s hard to maintain conviction when the market and economic punditry shift so much from week to week. Last week CDS indices hit their tightest prints for the year and credit volatility its lowest level since January 2022, but it was only a month ago iTraxx Crossover was flirting with the wides of the year — and a short time before that it set the previous tights. This week there’s some back and forth, but at 377bps this morning it’s essentially holding ground at the year’s tight end.

Credit volatility did tick up during parts of the recent journey, but the daily moves have not become excessively jumpy. As such, the overall effect has been less of panic or euphoria than considered changes in the market mood.