European Credit Market Update

I have a short verdict here: spreads are very wide in the real cash market and not that attractive at the offer side for high quality defensive names, where high quality Telecoms/Utilities are actually expensive ...
I am not chasing the high yield yet, and that may be quite synchronized with approaching the equities ...

I put here the excerpt from the "market wrap-up" by Juan Esteban Valencia from Societe Generale, for a "big picture" and contextual insight:

The Fed took the markets by surprise as it announced its latest measure to combat the crisis. The quantitative easing by the central bank will add its weight to the numerous rate cuts, bail-outs, fiscal packages and liquidity programmes that governments, central banks and financial authorities worldwide have thrown at the crisis. So far, all the measures together have failed to trigger a recovery although undoubtedly, all such efforts will in time reap the benefits and we are seeing the first signs that the US has perhaps reached a bottom. We still remain a long way from the robust growth of two years ago but at least the slide seems to be coming to a halt. Yet, while the latest efforts will surely help corporates lower their borrowing costs, whether they will translate into an eventual recovery in consumption remains to be seen. The initial market response to the Fed's announcement was one of optimism that helped equities rise in the US. By this morning the announcement's impact was wearing off slightly but nevertheless the synthetic indices managed to gain back some of the ground lost in recent sessions. We closed with the iTraxx Main at 184/185bp (-7bp from last night's close), the HiVol at 389/394bp (-11bp) and the X-Over at 1103/1108bp (-27bp).

Historical perspective in charts by Nordea Markets (click to enlarge).

And indicative levels for various indices by Societe Generale (click to enlarge).