Europe’s Credit Fear Gauge Sees Biggest Monthly Drop Since 2019
- Market has rallied since the ECB’s 50bps rate hike on July 21
- Uncertain economic outlook may weigh on second-half sentiment
This article is for subscribers only.
A gauge of default risk for Europe’s firms has dropped at the fastest monthly pace in three years as inflation and rate risks start to ebb.
An index of credit default-swaps on the region’s high-grade companies tightened more than 18 basis points in July, the biggest net monthly drop since June 2019, according to Markit’s iTraxx Europe index. A similar gauge for junk-rated firms declined the most since November 2020 as credit markets rebound from heavy first-half losses.