US Credit Markets Weaken Most in a Month After CPI Surprise
- Spread on CDS index widens as much as 6.7 basis points
- Hot inflation puts pressure on Fed for another big rate hike
A pedestrian outside the New York Stock Exchange in New York.
Photographer: Jonathan Alpeyrie/BloombergThis article is for subscribers only.
A measure of perceived US corporate credit risk quickly turned ugly Thursday, as traders swung from optimism to fear after inflation data once again came in higher than expected.
The cost to protect a basket of US high-grade bonds against default, measured by the Markit CDX North American Investment Grade Index, surged as much as 6.7 basis points to 109.2 following the release of September Consumer Price Index data. The index spread had been trading about two basis points tighter right before the data release.