DISTRESS WATCH: US Election Worries Halt Rally in Risky Credit

The rally in risky credit that has wiped $68 billion from the global distressed debt tally since August is running out of steam.

Spreads on the riskiest tier of US junk bonds recorded their first weekly increase in eight weeks, during the five days ended Oct. 25, according to Bloomberg index data. That halted what had been the biggest rally of the year, as traders pared bets on more rate cuts from the Federal Reserve and angst over the US presidential election increased, sending 10-year Treasury yields to the highest level since July.

Political uncertainty has started to ...