Swap spreads of high-grade companies and their junk counterparts has fallen

 

The gap between default swap spreads of high-grade companies and their junk counterparts has fallen more than 100 basis points since September. 

Known as “compression” in market parlance, it points to less fear that a sharp economic downturn will leave the weakest credits vulnerable to default. 

Even so, the measure remains above pre-pandemic levels.

Bloomberg 7 januari 2023 

https://www.bloomberg.com/news/articles/2023-01-07/optimism-makes-comeback-on-wall-street-with-soft-landing-eyed

The Junk Bond Reckoning Is Coming in 2023

Jonathan Levin Bloomberg 27 december 2022

https://englundmacro.blogspot.com/2022/12/the-junk-bond-reckoning-is-coming-in.html