European corporate credit default swap spreads nudged slightly tighter on Monday, with financial markets still trying to assess the extent of fallout from the Dubai debt situation. "We look for the market to stabilise over the next few sessions and for cash spreads to tighten gently into a very thin market into year-end," said Suki Mann, credit strategist at Societe Generale.
He predicted new issues might revive to allow the year-end total for non-financial corporate issuance to break the 250 billion euro ($375.9 billion) barrier. By 1639 GMT, the investment-grade Markit iTraxx Europe index was at 89 basis points, according to data from Markit, 0.75 basis points tighter versus late on Friday. The Markit iTraxx Crossover index, made up of 50 mostly "junk"-rated credits, was at 543.75 basis points, 0.25 basis points tighter.