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2025-09-17 17:27:30
[On the eve of the Fed's rate cut: European credit default costs hover at low levels] ⑴ On Wednesday, the Federal Reserve will announce its interest rate decision at 02:00 Beijing time on Thursday. The market generally expects a rate cut, and the cost of European credit default insurance remains low. ⑵ AJ Bell analyst Russ Mould pointed out that the first Fed rate cut in 2025, which investors have been looking forward to all year, is approaching, and market sentiment is high. ⑶ Institutional data shows that the iTraxx European Cross Index (Euro junk bond credit default swaps) fell 1 basis point to 251 basis points on Wednesday, close to the 3.5-year low of 248 basis points set on Monday. ⑷ The market expects that a 25 basis point rate cut will further boost market sentiment, but if there is a large rate cut of 50 basis points (less likely), it may trigger concerns about the outlook for the US economy. ⑸ European credit markets remained stable before the Fed's decision, reflecting investors' optimistic expectations for rate cuts and cautious attitude towards economic risks.
