Corporate bond liquidity put to the test

摘要

Liquidity in the US corporate bond markets is being put to the test as fears over the coronavirus intensify the sell-off across asset classes and outflows accelerate. Corporate bonds tracked a dizzying drop in asset prices last week, which was exacerbated on Friday following US President Donald Trump's decision to impose restrictions on travel from Europe. The spreads between bid and ask prices on corporate bonds in the secondary have widened substantially, indicating diminishing liquidity as investors tried to offload exposure to industries most affected by the coronavirus.