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Bond Investors Embrace Risk as ECB Starts Asset Purchases 

September 8, 2014
Sridhar Natarajan, Abigail Moses, Bloomberg

Measures of corporate-credit risk in the U.S. and Europe are indicating resurgent demand for company debt as the European Central Bank moves to cut interest rates and start asset purchases.

The cost of insuring against losses on European company debt slid to the lowest level in almost seven years, while a gauge in the U.S. approached a similar low. That’s happening as the corporate-borrowing market in the U.S. sprung back to life with the single busiest day of the year, according to data compiled by Bloomberg.

ECB President Mario Draghi today announced plans to start buying asset-backed securities and cutting benchmark rates to as low as 0.05 percent. In the U.S., services providers expanded at the fastest pace in nine years, signaling a recovery that’s firmly in place in the broadest sector of the world’s largest economy.

Read more: Bloomberg

 
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