European credit spreads drift tighter

European credit spreads were marginally tighter on Friday, retreating from already high levels after the Crossover index hit a record of around 935 basis points shortly after the open. By 1630 GMT, the investment-grade Markit iTraxx Europe index was at 184 basis points, according to data from Markit, 1 basis point tighter versus late on Thursday.
The Markit iTraxx Crossover index, made up of 50 mostly "junk"-rated credits, was at 914 basis points, 11 basis points narrower. One London trader said that compared with recent sessions, volatility was relatively calm: "Liquidity's very thin right now ... it's a very benign Friday."
The indexes tend to drift tighter in the absence of any negative credit-specific influences, as people are reluctant to hedge, particularly at the current high cost of buying protection. French retailer Carrefour priced a 700 million euro ($876.4 million) bond at 315 basis points over mid-swaps. That compares with initial indications of around 325 basis points. Five-year credit default swaps on Carefour widened 15 basis points to 125 basis points, according to Markit data.