The yield spread between junk-rated corporate bonds and U.S. Treasuries opened out late on Monday to its widest level since September, in a sign that overall investor confidence is deteriorating as worries about recession and a global trade war rise.
On the ICE BofA U.S. High Yield Index (.MERH0A0), a commonly used benchmark for the junk bond market, the option adjusted spread surged to 316 basis points, a level not seen since September 24. These spreads refer to the interest rate premium investors demand to hold low rated corporate debt over safer Treasuries.
