There is an index called the Markit iTraxx Crossover Index that measures the cost of protection against junk-rated companies in Europe defaulting on debt-using credit default swaps. It is watched very closely because it indicates sentiment in the credit markets.

The iTraxx Index hit its highest level in its five-year history, implying that a record number of sub-investment grade companies in Europe are getting closer to being unable to meet debt obligations.

Stress was also evident in the short-term money markets, with the spread between sterling overnight market rates and London interbank rates rising to 164 basis points from 127 basis points in January.

Continue reading European credit market sentiment sinks

European credit market sentiment sinks originally appeared on BloggingStocks on Fri, 06 Mar 2009 08:40:00 EST. Please see our terms for use of feeds.