Traders said clients were selling protection on insurance companies including Dexia, Axa and Prudential, following the decision late last Friday. Five-year senior protection for benchmark names Allianz and Axa are now both priced at around 85-90bp-mid. They both traded wider than 100bp last week as investors bought-up protection driven by fears of insurers' equity losses.
The subsequent equity rally on Monday kept credit default spreads tight at the start of the week. But as weakness re-ente