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JUNK BONDS HELD AN EDGE, narrowly outpacing investment-grade debt in net price gains linked to actual trades. Risk-taking remained largely muted nonetheless, as the pan-European Stoxx 600 vacillated to the shallow red amid pressure in the European auto sector. Allegations of misconduct aimed at several European carmakers from Volkswagen AG sent shares of Daimler AG, BMW AG, and VW down between 1.5% and 2.5%, impacting trading in related junk bonds. A floor on losses in commodities was maintained, however, as crude oil prices oscillated higher amid pledges of lower output from Saudi Arabia and Nigeria. 

SENTIMENT BECAME MORE RISK-AVERSE, as European junk bonds lagged investment-grade debt in net price gains linked to actual trades. A jump in the euro followed news today of fresh setbacks in President Donald Trump's agenda amid fading hopes for passage of a new healthcare bill. Further conspiring to keep pressure on European risk assets were a sharp 15.7% pullback in Ericsson AB shares, while a bout of profit-taking impacted recent gains in the financials and materials groups.

JUNK BONDS LAGGED INVESTMENT-GRADE NAMES in European trading, as global investors perceived a less hawkish Janet Yellen 'across the pond'. Indications from Federal Reserve Chair Yellen that  rate increases will maintain a gradual clip sent a spectrum of European equities higher, while global bond yields fell. A rally in oil prices on a bigger-than-expected drop in U.S. crude-oil inventories bolstered the oil-and-energy group, while upbeat sales by Burberry Group PLC sent luxury firms higher, lending additional sector cues  to corporate-bond traders.

'RISK-ON' BIAS PREDOMINATED - ALTHOUGH MODESTLY, keeping junk bonds with an overall margin over investment-grade debt, in net price gains linked to trades. Statements from Mario Draghi viewed as hawkish made up an important element in the mix, as the euro stepped higher. However pressure in the auto sector, sending Fiat Chrysler NV shares off 1.2%, and a 2.3% pullback in Deutsche Telekom AG, kept a lid on overall gains in risk assets.

A DOWNSHIFT IN OIL PRICES WEIGHED on risk-taking, keeping European junk bonds under pressure. Although Nymex oil at $43 kept a lid on gains in high-yield bonds, they maintained a modest edge over investment-grade debt. The oil prices took a toll on energy and mining securities, as Royal Dutch Shell PLC and BP PLC shares both tanked between 1.5% and 2%. The  European banking sector also felt pressure on the heels of charges of Barclays Inc. misconduct linked to Qatar, sending the bank's shares down 1.9%.