European credit spreads tightened on Friday after a big rise in unemployment in the United States in January raised expectations for swift government action to try to revive the economy. By 1608 GMT, the investment-grade Markit iTraxx Europe index was at 148 basis points, according to data from Markit, 7 basis points tighter versus late on Thursday.
The Markit iTraxx Crossover index, made up of 50 mostly "junk"-rated credits, was at 1,010 basis points, 40 basis points tighter. US employers axed 598,000 jobs in January, the deepest cut in payrolls in 34 years. This was more than the 525,000 forecast by economists. Hopes for a big government stimulus package to rescue the economy prompted a strong rally in US equities.