The cost of insuring corporate bonds and sovereign bonds from non-payment in the Asia-Pacific region rose, according to traders of credit-default swaps.
The Markit iTraxx Australia index advanced 2 basis points to 116 basis points as of 11:04 a.m. in Sydney, according to National Australia Bank Ltd. prices. The benchmark is on track to increase 2.3 basis points this week and set for its biggest weekly rise since the five-day period ended Nov. 16, according to data provider CMA.
The Markit iTraxx Japan index increased 0.5 of a basis point to 125.8 as of 9:12 a.m. in Tokyo, Citigroup Inc. prices show. The benchmark is headed for its first weekly rise since the week ended Dec. 7, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan rose 1 basis point to 109.5 as of 8:24 a.m. in Hong Kong, according to Credit Agricole SA prices. The measure is set to fall 1.8 basis points this week, its third straight weekly drop, CMA data 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.