The cost of insuring Asia-Pacific corporate and sovereign bonds from non-payment declined, according to traders of credit-default swaps.
The Markit iTraxx Australia index slid 4.5 basis points to 147.5 basis points as of 11:36 a.m. in Sydney, according to Westpac Banking Corp. The gauge is on course for its lowest close since Sept. 19, according to data provider CMA.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan lost 2 basis points to 125 as of 8:28 a.m. in Hong Kong, Credit Agricole SA prices show. The measure is also set for its lowest close since Sept. 19, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market.
The Markit iTraxx Japan index was little changed at 223 basis points as of 9:26 a.m. in Tokyo, Citigroup Inc. prices show.
Credit-default swap indexes are benchmarks for protecting 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.