Weaker Credit Spreads Due to Italian Uncertainties

BOND STRATEGIST: A review of how the recent Italian elections and the US sequester will affect credit markets

Dave Sekera, CFA 5 March, 2013 | 4:45PM

The election called into question the willingness of the Italian people to adhere to austerity measures

Credit spreads widened across Europe as the average spread in the Morningstar Eurobond Corporate Bond Index widened 3 basis points to +141. Credit spreads in the European financial sector experienced the brunt of the widening as represented by Markit's iTraxx Europe Senior Financials credit default swap index, which widened 13 basis points. That compares to the iTraxx Europe credit default swap index, representing the broader European corporate bond market, which widened 5 basis points.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
BAE Systems PLC458.00 GBX3.55
Boeing Co167.36 USD-1.01
General Dynamics Corp140.70 USD0.92

About Author

Dave Sekera, CFA  is a senior securities analyst with Morningstar.

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