Alpha Exchange

Dominique Toublan, Head of US Credit Strategy, Barclays

Nov 23, 2024
Dominique Toublan, Head of Credit Strategy at Barclays and a former physicist, discusses the dynamics of the credit market as the U.S. election approaches. He analyzes the impact of macroeconomic challenges and global demand for U.S. spread products. Touching on credit derivatives, he highlights how a scientific approach aids in navigating market complexities. Dominque also shares insights on risk management, emphasizing lessons from past market crises, and explores the rise of algorithm-driven trading in credit markets.
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ANECDOTE

Market Reactions

  • Dominique Toublan witnessed a silent trading floor in 2007 when treasury yields moved by five basis points.
  • He recalls the credit crisis and how people reacted, shaping his understanding of risk and scenario analysis.
INSIGHT

Election Impact on Credit

  • Credit spreads and implied volatility mirrored equity markets around the US election, influenced by potential delays in results.
  • Post-election, a "red sweep" was viewed favorably, boosting credit sectors like banks and energy, similar to equities.
INSIGHT

Credit Spread Drivers

  • Global demand for US credit is driven by yield, not spread levels, attracting investors like Taiwan life insurers.
  • This differs from CDX, dominated by CTA and macro investors using it for liquidity and tactical trades.
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