iTraxx Crossover underperforming?

Here in the UK there is no end of doom and gloom about Brexit and the state of the economy. One could be forgiven for approaching the end of 2017 in a bleak mood.

But the European investment grade market appears immune to this despondency; indeed, we are going into year-end in positively benign conditions. The Markit iTraxx Europe has closed tighter than 50bps over seven consecutive days, the first time it has done so in just over 10 years. Realized 20-day volatility on the index is at 23%, and this period of low volatility hasn’t been seen since the pre-crisis days.