FXStreet (Łódź) - Jim Reid from Deutsche Bank notes that the lower than expected US NFP reading on Friday as well as the relative stability of US rates resulted in a relief rally in US high yield yesterday.

Key quotes

"Indeed, the CDX High Yield index posted a gain of three-quarters of a point, which was its best performance since May 22nd and the iBoxx USD Liquid High Yield index rallied 8bp in yield terms to 5.90%."

"Over the past month, the latter has sold off by just under 100bp in yield terms, which leaves the index at pretty much flat on the year."

"We suspect that this repricing of risk is a welcome development at the Fed who has warned repeatedly about the froth in the lower-rated parts of the credit market in recent months."

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