European CDS edge wider after week-long rally

European credit default swaps widened slightly on Monday, breaking a week-long tightening streak spurred partly by a strong advance in equity markets. There are concerns the rally in credit spreads might have run too far, especially as October is seen as a key test for equity markets.
"Although the third-quarter earnings season looms large, we should be able to weather any ill winds from that direction," said Societe Generale credit strategist Suki Mann in a research note. By 1534 GMT, the investment-grade Markit iTraxx Europe index was at 86.53 basis points, according to data from Markit, 0.98 basis point wider versus late on Friday. The Markit iTraxx Crossover index, made up of 44 mostly "junk"-rated credits, was at 558.13 basis points, 0.13 basis point wider. Five-year CDS on HeidelbergCement jumped about 85 basis points tighter at around 482 basis points.