European CDS widen

European corporate credit default swap spreads widened on Tuesday as the negative backdrop of weaker bank stocks weighed on sentiment. The restructuring of Lloyds Banking Group and Royal Bank of Scotland set the tone for the market. But one dealer said that actual trading of the key indexes was limited.
"There was more price jostling than actual trading. Dealers are cautions as we slide wider and stocks fall. Also end client flow has been light of late so the market is keeping light footed and nimble. I'd describe it as almost fragile," said the trader.
By 1743 GMT, the investment-grade Markit iTraxx Europe index was at 90.50 basis points, according to data from Markit, two basis points tighter versus late on Monday. The Markit iTraxx Crossover index, made up of 50 mostly "junk"-rated credits, was at 527 basis points, 21 basis points wide.