European credit default swap indexes tracked a share market slump on Friday as well as a rally on Thursday, but Commerzbank analysts forecast the two markets could decouple within the next three months. "Credit indices largely lost their role as leading indicators towards the end of 2008," wrote Gunnar Stangl, Commerzbank head of portfolio strategy, in a note to investors.
"Since then, equity markets have led and credit followed." By 1617 GMT on Friday, the investment-grade Markit iTraxx Europe index was at 89 basis points, according to data from Markit, 4 basis points wider versus late on Thursday. The Markit iTraxx Crossover index, made up of 50 mostly "junk"-rated credits, was at 515.75 basis points, 12.75 basis points wider.