Rising Concerns Over AI Lead to Increased Costs of Euro Credit Default Swaps

On June 23, concerns over the valuations of AI companies led to a deterioration in market sentiment, resulting in higher costs for credit default protection on euro-denominated credit bonds. Strategists at Deutsche Bank noted in a report that worries in the tech sector overshadowed investor optimism regarding progress in US-Iran negotiations. According to S&P Global Market Intelligence, the iTraxx Europe Crossover index for euro high-yield credit default swaps rose by 3 basis points to 250 basis points. Meanwhile, the iTraxx Europe Main index for euro investment-grade credit default swaps climbed by 1 basis point to 52 basis points.