In Credit: What goes up must come down.

Government bond prices were little moved in the last week after a ‘helter skelter’ few weeks. In terms of data the Eurozone PMI was very weak (less than 30). This was led lower by an especially low print from Italy (20.2 composite). These numbers seem consistent with a 10% contraction in eurozone growth. The US employment report showed the loss of 700k jobs (exp -100k). There is more to come. There was though better COVID-19 news out of Spain, Italy and NYC. The pace of new cases and fatality growth is slowing suggesting a peaking out of the pandemic in these areas. There are tentative signs of something similar in the UK.