European credit default swap indexes widened further on Thursday, with the iTraxx Europe index moving above 90 basis points for the first time since early September. The iTraxx Series 11 index had ended at about 90 basis points on September 9 2009, according to Markit data.
Sentiment about a robust recovery from the credit crisis has become more mixed across financial markets this week. "The greatest spread rally in the history of the credit markets is finally showing signs of slowing down," Suki Mann, credit strategist at Societe Generale said in a note.
"The Q3 earnings season is starting next week, and we believe it will be positive overall for credit. However, the rate of improvement is more measured now," he said. By 1533 GMT, the investment-grade Markit iTraxx Europe index was at 93 basis points, according to data from Markit, 5.5 basis points wider versus late on Wednesday.
The Markit iTraxx Crossover index, made up of 50 mostly "junk"-rated credits, was at 593 basis points, 24 basis points wider. Enel was among the most actively traded CDS, according to Markit data. The Italian utility on Wednesday raised $4.5 billion in a three-part bond issue. Five-year CDS on Enel were about 2.15 basis points wider at about 103 basis points, according to Markit. Five-year CDS on German speciality chemicals producer Evonik Degussa were about 1.78 basis points tighter at about 88 basis points, according to Markit.