Credit default spreads narrow globally after Trump's tariff pause, but fears of recession remain.

From Yahoo Finance: 2025-04-10 05:44:00

Investors saw a decrease in the cost of insuring against European and Asian debt defaults after Trump’s decision to pause import tariffs. The iTRAXX Crossover index fell to 376 bps, while the highest-rated entity index dropped to 74 bps. However, nervousness remains over the trade war between the U.S. and China.

Saxo’s chief investment strategist advised clients to manage fixed-income exposure amidst market volatility. U.S. and Chinese sovereign credit default swap spreads only slightly contracted, showing ongoing investor concerns. In contrast, Japan’s CDS spreads decreased. The Markit Itraxx Asia ex-Japan index also saw a drop to 114 bps.

The recent relief rally in global markets led to a decrease in insuring against default costs, but fears of a recession due to U.S. tariffs persist. Investors are advised to stay flexible and rebalance portfolios during the next 90 days of potential market noise.



Read more at Yahoo Finance: Global credit default spreads narrow as markets rally