High Yield Spreads

Futures are sharply lower this morning once again on concerns regarding liquidity in the credit markets.  However, a look at spreads in the high yield corporate bond market yesterday shows that investors were warming back up to the sector (at least temporarily).  The spread between interest rates on high yield corporate debt versus yields on treasuries declined by over 6%.

Red lines in the charts above indicate periods where high yield credit spreads were in a widending.