Not Yet Out Of The Woods

Key Points


Q3 earnings continue to come in hot, though management comments remain uncertain on the timeline of normalization of supply chain concerns

While inflation expectation soared over the week, front-end is much more impacted by the ongoing ‘transitory’ factors vs. the longer end

Credit spreads tightened modestly and were rather underwhelming vs. the equity market amid encouraging earnings figures; Evergrande finally paid the coupons

Downside hedging demand remains elevated, which should provide some safety buffer together with decent cash levels should the market sentiment deteriorate into ‘illiquid‘ December

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