European credit default swap spreads were slightly tighter on Friday, alongside modest gains in US equity markets after mixed non-farm payrolls data. By 1446 GMT the investment-grade Markit iTraxx Europe index was at 96.82 basis points, according to data from Markit, 1.18 basis points tighter than late on Thursday.
The Markit iTraxx Crossover index, made up of 44 mostly "junk"-rated credits, was at 615.50 basis points, 4.50 basis points tighter. Credit strategists at Unicredit noted that the iTraxx Europe index had closed at 100 basis points on September 3 last year, just before the credit crisis hit the financial services sector.
The index has returned almost to that level on expectations for economic recovery. Unicredit pointed to optimistic forecasts from the OECD this week that predicted a return to growth in the eurozone, the United States and also the Group of Seven nations in this and next quarter. "But the long-term impact of last year's events will dog us in the foreseeable future and significant vulnerabilities remain for both the economic recovery and the financial sector," it said in a note to investors.