Credit risk has awakened from its summer slumber over the last couple of days with the CDX IG and iTraxx main now trading 8 and 11% higher than their close on Thursday. While it’s still too early to see whether this latest surge is a passing event or a longer lasting trend both indices are still below their 12 month averages and now trade roughly 40% off the highs set earlier in the year.

This recovery has not lifted all investment