Encouraging US data helps CDSs on European banks narrow

Five-year senior credit default swap (CDS) spreads referencing European banks narrowed this morning. With JP Morgan announcing a first-quarter profit of $2.1 billion, market participants hoped for more encouraging news from the US.

As of 10:40am BST, the cost of credit protection on Barclays had fallen to 189.3 basis points from 195bp at close of trading yesterday, according to data provided by credit information specialist CMA Datavision. Other UK banks saw similar moves in their spreads this morning: CDSs on HSBC tightened from 123bp to 120bp; spreads referencing Lloyds TSB narrowed to 183.7bp from 188.2bp; and Royal Bank of Scotland saw its CDSs move in from 189.7bp to 185bp. UK insurer Legal & General - which reported

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