Credit markets remained resilient against stock market volatility today, and nowhere was that more evident than among European carmakers.

News that car sales across the EU fell 10% in the first-quarter was disappointing for an industry already under significant pressure. Even Germany - the largest and most profitable market - saw sales decline by 13%.

The UK was the only country not to suffer double-digit falls, whereas Cyprus saw sales drop by 59% in March compared with a year ago.

Some manufacturers fared better than others, although no company had reason to cheer. Germany's BMW and Daimler both reported EU sales that were more or less flat over the first-quarter, a decent performance in comparison to its peers. Volkswagen saw its sales fall by 8%, France's Peugeot 15%, and Toyota of Japan's saw sales fall 18%.

Share prices in all three German companies fell considerably. However, their CDS were unmoved by the news and at 80bps, 89bps and 90bps respectively, are still trading at solid investment grade levels. They are nearly 30% tighter compared with this time last year, unlike Peugeot, which is more than 30% wider.

The broader market underwent a sell-off late in the afternoon, with commodity names once again leading the way. Gold recovered slightly from its recent losses, but the price of oil continued to decline after US data showed that demand for petrol is weakening.

The Markit iTraxx Europe was over 2bps wider at 113.5bps, while the Markit iTraxx Crossover was over 10bps wider at 456bps.

Finally, there was some interesting news from academia . A paper from a US university cast doubt on the validity of the influential work of Carmen Reinhart and Kenneth Rogoff. Politicians across the world have cited the recent work of Reinhart and Rogoff, which states that countries with a debt/GDP ratio in excess of 90% suffer significantly lower growth, as justification for austerity measures.

However, the paper published by the University of Massachusetts yesterday indicated that the Reinhart and Rogoff methodology was flawed, and they found quite different results when using the same dataset. The issue of causation has always been a problem with Reinhart and Rogoff's work - does high debt cause low growth or is it the other way around? The case for austerity appears to be getting weaker.

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