European credit derivatives markets nudged tighter on Monday morning, although the long weekend in the US meant market activity was minimal.
The benchmark iTraxx Crossover index, a key indicator of European credit sentiment, shed 4bp to 326 bp in mid-morning trade. The iTraxx Europe index, which tracks 125 investment-grade corporate borrowers, was little changed at 45bp, according to Bloomberg data.
This week, market participants will have to contend with a slew of data, including Thursday’s interest rate decisions by the Bank of England and the ECB. US figures – including ISM manufacturing on Tuesdayand non-farm payrolls on Friday – will be closely watched.
In single name news, five-year credit default swap contracts on Gaz de France and Suez saw further convergence after their boards approved the revised terms of a merger plan, clearing the way for the creation of the world’s third-largest power utility, Reuters said. CDS on Gaz de France traded at 25bp, with Suez at 28bp, according to Deutsche Bank prices.
British airport operator BAA widened 8bp to 92bp on speculation its Spanish owners, Grupo Ferrovial, will have trouble completing a planned £9bn refinancing, Markit analyst Gavan Nolan said.