European credit spreads widened sharply on Wednesday, accelerating through the course of the day, as disappointing US sales and other data added to concerns about global recession. By 1507 GMT, the Markit iTraxx Crossover index, made up of 50 mostly "junk"-rated credits, was at 712 basis points according to data from Markit, 47 basis points wider versus late on Tuesday.
The investment-grade Markit iTraxx Europe index was 8.75 basis points wider at 132.75 basis points. Shares also fell as the focus shifted to the likelihood of a deep recession, after government intervention had eased fears of a financial meltdown.
Adding to recessionary concerns, US retail sales posted their biggest monthly drop in more than three years in September, while a gauge of manufacturing in New York State in October sunk to its lowest level since inception in 2001.
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