Fading credit liquidity – Down but not yet out?
For Gregory Venizelos, senior economist at AXA IM, the inability of dealer desks to provide liquidity during periods of risk off is a major concern for credit investors.
The initiatives like the development of electronic platforms are not yet capable of absorbing a broader market correction.
AXA IM’s liquidity indicator shows a benign current market regime, sporadically interrupted by bouts of illiquidity. The complacency of Q2 2014 has been partially corrected by the market in terms of underpricing liquidity risk.
The full research is available below.