The cost of insuring Asia-Pacific corporate and sovereign bonds from non-payment increased, according to traders of credit-default swaps.
The Markit iTraxx Australia index advanced 9 basis points to 200 basis points as of 10:10 a.m. in Sydney, Westpac Banking Corp. prices show. The measure is on course of its biggest one-day gain since May 16 and its highest close since June 6, according to CMA.
The Markit iTraxx Japan index rose 8 basis points to 190 as of 9:21 a.m. in Tokyo, Deutsche Bank AG prices show. The benchmark is set for its biggest daily increase since May 14, according to CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan climbed 7 basis points to 196 basis points as of 8:41 a.m. in Hong Kong, Royal Bank of Scotland Group Plc prices show. That brings gains to 63.5 basis points from a low this year of 132.5 reached on March 19, according to CMA.
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.