European corporate credit default swap spreads widened on Friday, led by banks, as markets grew more nervous about the eurozone's debt problems and the outcome of US investigations into whether some banks misled clients. By 0923 GMT, the investment-grade Markit iTraxx Europe index was at 103.5 basis points.
According to data from Markit, 6 basis points wider versus late on Thursday, according to data from Evolution Securities. The Markit iTraxx Crossover index, made up of 50 mostly "junk"-rated credits, was at 473 basis points, 12.5 basis points wider. The senior financials index widened by about 10 basis points to 141 basis points, with Irish banks underperforming in particular, a trader said.
US prosecutors are conducting a broad criminal investigation of six major Wall Street banks, including J.P. Morgan Chase & Co and Citigroup Inc, to determine if they misled investors on mortgage-bond deals, a person familiar with the matter said on Thursday.
Meanwhile, Deutsche Bank Chief Executive Josef Ackermann raised fresh doubts on Greece's ability to repay its debt in a TV interview late on Thursday. The cost of insuring peripheral eurozone government debt against default rose on Friday, having fallen sharply this week. The iTraxx Sovereign Western Europe index widened 10 basis points to 121 bps, while Greece, Spanish and Portuguese CDS widened by around 10 to 20 bps.
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