Credit market buoyant in the face of stress tests
Market sentiment towards US financials improved in European trading despite continuing speculation that some US banks will need to raise significant amounts of extra capital.
Five-year senior credit default swap (CDS) spreads referencing Bank of America tightened from 276.5 basis points at close of trading in New York yesterday to 245.2bp at 4:45pm BST today, according to data from credit information specialist CMA Datavision. Spreads also narrowed to 480.5bp from 564.3bp on Citi.
CDSs on other Wall Street firms also moved in today, with spreads on Goldman Sachs trading tighter at 219bp from 235.1bp, and those on Morgan Stanley moving to 324.3bp from 349.9bp. Credit
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