European corporate credit derivatives were mixed on Wednesday with the market focused on sovereign CDS for a second day as Greece led a slump. Five-year CDS on Greece widened to 229 basis points after opening at 218 basis points, a trader said.
That compared with Tuesday's close at 210.5 basis points after widening 22 basis points on the day, according to Markit data, after Fitch cut Greece's rating to BBB+ from A- and also downgraded four of the country's largest commercial banks.
"The bulk of activity and all the focus is on the sovereign world, with Greece making a massive move within an hour or so," the trader said. The new Markit iTraxx SovX index of 15 western Europe countries widened to 68 basis points, the trader said. That was the widest level since it debuted in September and compared with 63.5 basis points on Tuesday and 57 basis points on Monday, according to Markit data.
By 1132 GMT, the investment-grade Markit iTraxx Europe index was at 82.5 basis points, according to data from Markit. That is 1.25 basis points wider versus late on Tuesday, based on data from BGC Partners. The Markit iTraxx Crossover index, made up of 50 mostly "junk"-rated credits, was unchanged at 495 basis points.
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