Global Credit Risk Eases and Draws Back Issuers on Tariff Pause

The cost of insuring European companies against default fell by the most since 2020 on Thursday, following similar moves in Asia after the US postponed higher trade tariffs.

A gauge of junk-rated credit default swaps dropped as much as 67 basis points, reversing the spike seen earlier this week as the tariff plans roiled global markets. For investment-grade debt, an index tightened as much as 15 basis points, also the biggest move seen in five years.

That followed on from declines in indexes in Asia and the US. The shift in sentiment brought back borrowers in Europe, with at ...