30 June – 4 July 2025

Corporate Bond Market – Week Ending 4 July High-yield spreads continued to tighten (BB -10bps, B -8bps), but CCCs bucked the trend with a sharp +45bps widening. Despite strong technicals and oversubscription in global credit markets, investment-grade spreads remain detached from fundamentals—pricing in default rates below current levels. Proceed with caution: this rally’s more technical than fundamental.

Figure 1: Australian Swap to Bond Spreads

Figure 2: ITRAXX Australia – CDS Index