Credit Risk Climbs for Second Day in Europe to Highest in Week

The cost of insuring corporate bonds against losses climbed for a second day in Europe, rising to the highest in a week.

The Markit iTraxx Europe Index of credit-default swaps linked to 125 investment-grade companies increased two basis points to 74.5 basis points, the highest since Feb. 13, according to data compiled by Bloomberg.

Europe’s recovery showed signs of cooling this month, with indexes of manufacturing and services both coming in weaker than economists forecast. China’s manufacturing dropped to a seven-month low in February, according to a private index, fueling concerns that emerging market economies will slow as the Federal Reserve withdraws stimulus measures.

“There’s an increasing degree of nervousness with the combination of problems in emerging markets and recent figures showing a weaker growth outlook for the global economy,” said Simon Ballard, a strategist at National Australia Bank Ltd. in London. “People are playing closer to home, maybe taking some chips off the table.”

To contact the reporter on this story: John Glover in London at johnglover@bloomberg.net

To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net

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