The cost of insuring corporate and sovereign bonds in the Asia-Pacific region against non-payment declined, according to traders of credit-default swaps.
The Markit iTraxx Australia index tumbled 5 basis points to 100.5 basis points as of 9:14 a.m. in Sydney, Westpac Banking Corp. prices show. The gauge is set for its biggest one-day drop since Feb. 22 and poised for its lowest close since January 2011, according to Westpac and data provider CMA.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan fell 3 basis points to 105 as of 9:01 a.m. in Singapore, Australia & New Zealand Banking Group Ltd. prices show. The benchmark is set to fall 5.7 basis points this week, according to ANZ and CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the private market.
Markets in Japan are closed today for a public holiday.
Credit-default swap indexes are benchmarks for insuring bonds against default and traders use them to speculate on credit quality. A drop signals improving perceptions of creditworthiness, while an increase suggests the opposite.
The swap contracts pay the buyer face value in exchange for the underlying securities if a borrower fails to meet its debt agreements.
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