CDS spreads narrow on US and European financials
The cost of credit protection on US and European banks fell in early trading today, while remaining high on Latin American and eastern European sovereign debt.
Despite predictions today from rating agency Moody's Investors Service that the number of rated defaulting corporate issuers will triple from 101 in 2008 to "roughly 300" this year, with the greatest casualties expected in the financial sector, credit default swaps (CDS) referencing banks on both sides of the Atlantic traded tighter today.
Five-year senior CDS spreads on Royal Bank of Scotland, which this morning announced 2008 losses of £24.1 billion, tightened to 167 basis points at 2:30pm
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