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2018 ended on a sour note and spreads looked set to continue their ascent throughout this year and beyond. But here we are, a little over a week into 2019, and the Markit iTraxx Europe is 10bps tighter than Dec 31 levels.

A bumper non-farm payrolls report, a more dovish stance from the Federal Reserve, optimism on US-China trade talks and Chinese economic stimuli all served to compress spreads after a shaky start.