A widespread hike in risk aversion was the key element in October. Despite a solid level of activity in the US economy, the recognition of a rise in US interest rates and the negative effects of growing protectionism contributed to the re-pricing of risky assets. China's growth, meanwhile, is showing signs of a slow-down as reflected in numbers on the PMI, which were sharply down in October.In Europe, the Italian budget was rejected by the European Commission, which has suggested that Italy should review its draft by mid-November. Nevertheless, Italy remains at investment grade, judging from the scores awarded it by leading ratings agencies, but the concern remains. For this reason, the risk premium on Italian government bonds rose after publication of its disappointing Q3 growth figures. The coalition government will thus face growing difficulty in justifying its growth assumptions and, therefore, its future deficit. In the United Kingdom, a glimmer of hope has emerged on Brexit. According to a British spokesman the agreement is 95% done.Given the tense political and economic climate, equity markets and high yield credit were sharply down this month. The European and US high yield indices were down by -1.20% and -1.60%, respectively. Likewise, government bonds in peripheral European economies are down, in contrast to government bonds in core European countries, which have been playing their role as a safe haven. The yield on the German bund was thus down -8 bps at 0.38%.