Yields remained remarkably stable in the face of some equity market volatility and worries about inflation.

Credit spreads were stable too enabling the new issue primary market machine to continue printing across all currencies. Amazon came in dollars with an 8 part multi-tranche and set a new tight spread record for corporate 10 year funding, adding a further $18 billion to their already cash bloated balance sheet.

We continued to reduce duration and increase our floating rate exposure, halving our recent purchase of J P Morgan 33’s, selling our Berkshire Hathaway 39’s and recycling proceeds into our existing RBC 2025 SONIA referenced FRN position. Issuance into Tier 2 bank capital picked up in Sterling and we took some of the new Virgin Money 10-year with a 5-year call, which was well supported. We saw some maturities in the form of the Wellcome Trust 21’s and a LBBW note which both rolled off.

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