The Markit CDX North America Investment Grade Index, a credit-default swaps benchmark that investors use to hedge against losses on corporate debt or to speculate on creditworthiness, decreased 0.8 basis point to a mid-price of 95.2 basis points at 7:59 a.m. in New York, according to prices compiled by Bloomberg.
The measure declined as ECB policy makers left the benchmark rate at a historic low of 0.75 percent. The U.S. will release weekly jobless claims figures today and September payrolls tomorrow after ADP Employer Services showed better- than-expected gains in employment yesterday. Signs of economic growth may reassure investors that companies’ balance sheets are improving, strengthening their ability to repay obligations.
The credit-swaps index typically falls as investor confidence improves and rises as it deteriorates. The contracts pay the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt. A basis point equals $1,000 annually on a contract protecting $10 million of debt.
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