Its all about supply
Credit and swap spreads over benchmark government bonds are influenced by various factors, but one of the most crucial is the relative supply of government and corporate debt. Throughout Europe and the US, Barclays has been warning of a significant widening of spreads this year largely based on our forecasts for better than expected public finances and thus lower government borrowing requirements, and far higher than expected levels of corporate bond issuance.
Government supply is dwindling...
In the US for instance, estimates of the governments fiscal surplus and the likely size of future debt buy-back operations have been revised higher all year, and the lack of a...
