CDSs on European banks narrow as stock markets rally
The cost of credit protection on European banks began to fall this morning following data from the US showing the rate of decline in the US manufacturing sector is decelerating, coupled with reports of UK house prices rising for the first time since October 2007.
Five-year senior credit default swaps (CDS) referencing Barclays -which confirmed on March 31 it would not subscribe to the UK government's asset-protection programme - moved in from 220 basis points last night to 211bp as of 10:40am BST this morning. HSBC - which has also opted not to sign up to the scheme - saw its CDSs tighten from 158.6bp to 154.6bp. Meanwhile, spreads referencing Royal Bank of Scotland tightened from 210.9bp to 208.3bp, and CDSs on Lloyds TSB narrowed from 207.5bp to 205
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