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Bond markets have seized up and fund managers fear that a global “meltdown” has become unavoidable, according a survey of traders, investors and analysts of European corporate debt...
...As a result of the lack of liquidity, “virtually every participant" in the European corporate bond market “sees a correction lurking over the horizon”, according to ICMA [the International Capital Market Association].
“[A] common thread in the various discussions with all participants is the inevitability of a meltdown in global credit markets,” the report said. “The only debate seems to be on the timing and the catalyst...”
People don’t trade when markets don’t move, and with interest rates at record lows around much of the world, volatility has been absent for some time...
...Howkins is upbeat, though: “Certainly, the quarter was quite quiet… [but] it doesn’t take a genius to work out we were a bit busier in October. I don’t think there’s any suggestion that markets have settled to a new norm of low volatility. I’m optimistic we’ve seen the bottom of the cycle.”