FYI: For much of 2015 and earlier this year, the high yield fixed income market and oil prices were joined at the hip. If you wanted to know what high yield was doing, one of the best real-time barometers of the sector’s performance was crude oil prices. Since the start of the second half of the year, though, there has been a distinct shift in the performance of the two asset classes. The first chart below compares high yield spreads (left axis) per the Merrill Lynch High Yield Master Index to the price of crude oil on an inverted basis (right axis). From the start of the year through the end of June, the two moved tick for tick with each other, so that when crude oil prices rose, spreads narrowed and vice versa. Since oil made a short term peak and fell 20%, however, high yield hung in there as spreads remained right near their YTD lows
Regards,
Ted
https://www.bespokepremium.com/think-big-blog/high-yield-and-oil-diverge/
