The cost of insuring Asia-Pacific corporate and sovereign bonds from non-payment increased, according to traders of credit-default swaps.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan rose 2 basis points to 166.5 basis points as of 8:30 a.m. in Hong Kong, Royal Bank of Scotland Group Plc. prices show. The gauge is on course for its highest close in three days, according to data provider CMA.
The Markit iTraxx Australia index climbed 3 basis points to 157 as of 10:06 a.m. in Sydney, Westpac Banking Corp. prices show. The measure has traded between 182.8 and 128.2 this year, according to CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market.
The Markit iTraxx Japan index gained 2 basis points to 175 basis points as of 9:20 a.m. in Tokyo, Deutsche Bank AG prices show. The index is also set for the highest close since April 16, CMA prices show.
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. A basis point is 0.01 percentage point.