Cost of Default Hedges in Europe Tops Level Last Seen in 2020
- High-grade credit-default swap index spread rises above 100bps
- Economic slowdown, inflation pummel Europe’s credit market
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A risk gauge on Europe’s safest companies has breached 100 basis points for the first time in more than two years, as the spectre of rampant inflation mixed with an economic slowdown spooks investors.
An index of credit default swaps for investment-grade firms in Europe climbed as high as 100.2 basis points, a level not seen since the coronavirus pandemic first roiled markets in the first half of 2020, according to data compiled by Bloomberg. A similar gauge for the region’s junk-rated firms has hit the highest since May 2020.