JPMorgan’s E Beinstein - Relative to Treasuries high grade bond are, as of yesterday, the cheapest they have been all year in percent terms $$

Credit Update – from JPMorgan’s E Beinstein - Relative to Treasuries high grade bond are, as of yesterday, the cheapest they have been all year in percent terms, though spreads are 17bp below the YTD high of 182bp reached in early June. High grade bonds at the current average spread of 165bp offer a 64% pickup over the average Treasury bond yield of 2.59%. This ratio peaked at over 300% during the height of the credit crisis. It fell to a 2010 low of 34% on April 15. High grade bond investors are faced with valuation extremes - absolute yields are very expensive but spreads have been getting cheaper in percent terms relative to Treasuries