European credit risk indexes have fallen to the lowest in more than two years as investors bet that central bankers will be successful in taming inflation. The Markit iTraxx Europe index tracking default risk for high-grade firms has dropped to 56.1 basis points and its lowest since January 2022, according to data compiled by Bloomberg. A similar gauge tracking junk-rated corporate bonds is also back at a two-year low. Credit markets globally have rallied this year as investors increasingly expect central banks to be able to curb inflation without triggering a major economic slump, known as a “soft landing.” ... (full story)