Ukraine on the brink
Ukraine's sovereign CDS spread is approaching the high reached right before the Russian bailout was announced. The currency is nearing the pre-bail-out lows.
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Browsing Tag
credit default swaps
In the event of a missed payment, the US has three days to cure
US CDS is based on treasuries (linked to a specific security - the co-called "reference obligation"), which according to the official offering document (see offering circular here), do not have a "grace period". Under such circumstances…
Nationalized Dutch bank investors fight expropriation
The shareholders and subordinated bond holders of SNS Reaal are now fighting an alleged expropriation at the Dutch Council of State. In addition, these stakeholders are contesting the Dutch government's position that shareholders and…
The euro crisis will move ever closer to the core
My view is that the euro zone sovereign debt crisis will end in a combination of monetisation, breakup or default. Let's review why.
Chart of the day: Spain enters top ten for government default risk
Spain is now ranked ninth for default probability just behind Ireland, with an expected 40% chance of default in the next five years. The Spanish 10-year bond yield has fallen back to 6.70% after reaching a record euro zone high of 6.834%…
German sovereign CDS widening is a troubling sign
The focus recently has all been on the Eurozone periphery, but signs of strained financial conditions are now showing up in German sovereign CDS. The spread has been steadily rising.
German decoupling is an illusion
The concept of German decoupling from the Eurozone recession may have been wishful thinking. The latest German Manufacturing Purchasing Managers' Index (PMI) has converged with that of the Eurozone as a whole. Manufacturing PMI is a closely…
On Spain, Spanish banks and Spanish local elections
The LTROs may have helped ease this year's roll-over risk (Spain has met almost 50% of this year's refinancing needs). But they have not substantially altered the market's views of the risks of an eventual restructuring.
Dollar Broadly Stronger as ISDA Decision and NFP Looms
The Greek government said PSI went through with a 95.7% participation rate after CACs were activated. Before the CACs, however, that rate was only 85.8%. ISDA’s determinations committee will decide today at 08:00 EST whether a credit event…
Chart of the day: 2012 sovereign risk compression
Great data from Bespoke. Looks like Portugal is the odd man out as the only government in which its CDS spreads have widened this year.