Euro Credit Default Protection Costs Fall as Tech Stocks Recover

Dow Jones10-14

0929 GMT - The cost of insuring euro-denominated credit against default falls as European stocks and U.S. equity futures rise. A recovery in AI-related stocks boosts sentiment after Dutch group ASML Holding lifted its guidance for the third time this year. However, concerns about excessively high financing needs for AI-related projects and whether credit demand will be sufficient keep high-yield CDS prices elevated. "Supply bottlenecks, valuation pressure and concentration risk leave the [AI] sector vulnerable," says Tickmill Group's Patrick Munnelly in a note. The iTraxx Europe Crossover index of euro high-yield credit default swaps falls 4 basis points to 311bps but stays close to last week's six-month high of 316bps, S&P Global Market Intelligence data show.

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