Euro High-Yield CDS Costs Fall to Four-Month Low After U.S.-Iran Deal Reported

The cost of default protection on euro-denominated credit debt fell to its lowest level in nearly four months after a reported agreement between the United States and Iran to end the war improved market sentiment. According to Jin10, ActivTrades analyst Frank Sohlleder said investors turned more optimistic after reports of a peace deal, which he said could bring an “immediate normalization of the Strait of Hormuz and a sharp decline in prices in a highly competitive energy market.” S&P Global Market Intelligence data showed the iTraxx Europe Crossover index for euro high-yield credit default swaps fell 5 basis points to 248 basis points, the lowest level since February 20.