Asia-Pacific Bond Risk Falls, Credit-Default Swap Prices Show
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. (WBC) 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 (ACA) 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.
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