Credit Spreads (IEF/JNK)

The ratio chart reflects Treasuries (IEF ETF) relative to Sub-Investment Grade (JNK ETF) which is of significance in both the equity and credit markets as a gauge of 'stress' in financial markets.

The current position reflects equal demand for treasuries vs junk bonds - a trend that has been in place since April 2021. Over the short term, the ratio is at the bottom of the range, reflecting a lack of stress among investors however market participants would be wise to remain cognizant of the similarities in technical structure where a breach of the upper boundary of the sideways range might suggest a 'risk-off' period among investors, particularly in equities.