Asian and European Credit Emerges Unscathed by More Hawkish Fed

Corporate debt in Europe and Asia looks set to be barely bruised by the Federal Reserve’s more hawkish outlook for interest rates.

The cost of protection against defaults from Europe’s high grade and junk-rated companies rose Thursday, yet to just its highest level in a week. Only 30 bonds in the 3,222-member index of euro high-grade corporate bonds fell by more than half a cent.

The muted reaction shows that Europe’s credit market has much more going for it than accommodative Fed policy. Investors have been snapping up company debt to benefit from improving indicators of corporate strength as economies ...