European Corporate Credit Spreads Hit Two-Year Low As Rate Cut Hopes Shift

Borrowing costs for European companies have fallen to a two-year low against benchmark bonds, as shifting expectations on interest rates narrow the gap with their US counterparts. The average European investment-grade spread — the premium paid by companies to borrow over equivalent German government bond yields — has dropped from 1.36 percentage points to 1.15 percentage points this year, according to Ice BofA data.