Corporate bond markets resumed their rally across the investment-grade and high-yield markets last week. The average spread of the Morningstar Corporate Bond Index (our proxy for the investment-grade corporate bond market) tightened 4 basis points to end the week at +124. In the high-yield market, the average spread of the ICE BofAML High Yield Master II Index tightened 19 basis points to +386. However, while investors snapped up corporate bonds, Treasury bond prices fell across the yield curve. The yield on 2- , 5-, 10-, and 30-year Treasury bond yields rose by 6, 9, 10, and 10 basis points respectively, to 2.55%, 2.56%, 2.75%, and 3.12%. Equities generally rose as the S&P 500 increased 0.39% and most European indexes increased close to 1% for the week (except for the U.K. FTSE, which dropped as investors are increasingly worried that a hard Brexit is rapidly approaching).
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