European Spreads Above U.S. as Growth Diverges: Credit Markets

Relative yields on European investment-grade company bonds are the highest ever compared with U.S. debt as the region’s deficit crisis worsens and the U.S. economy revives.

Investors demand an extra 189 basis points in yield to own high-grade euro-denominated bonds instead of government debt, compared with a spread of 169 for U.S. corporate notes, Bank of America Merrill Lynch index data show. The 20 basis-point difference matches the record reached on Dec. 15.