Credit markets
EC derivatives working group meets to overhaul OTC markets
The European Commission’s working group on derivatives, established on October 22, held its first meeting in Brussels last week.
UK CDSs rise
The cost of credit protection on European banks widened today while market sentiment towards US financial institutions improved.
CDS spreads fall this morning
The cost of credit protection on European banks tightened in early trading today after reaching a peak on Friday, as quarterly profits plummeted.
Treasury and Fed help AIG lay-off CDO risk
AIG was shored up by a restructuring plan hammered out by the US Treasury and Federal Reserve Bank of New York today, which involved the creation of an off-balance-sheet vehicle to neutralise some of the insurer’s hefty collateralised debt obligation …
Ted spread continues to fall
Following last week's rate cuts, the Ted spread, which tracks the difference between three-month Libor and Treasury bills, had fallen today to 2.01 when trading opened, the same level as September 15, when Lehman Brothers filed for bankruptcy.
EU convenes working party on derivatives
Daily news headlines
DB x-trackers delivers first credit ETFs
DB x-trackers, the exchange-traded fund (ETF) arm of Deutsche Bank, has unveiled the first ETFs on the long and short Markit iTraxx Europe Financials indexes, enabling investors to buy and sell credit protection on senior and subordinated financial debt…
Sterling Libor eases after rate cuts
Yesterday’s interest rate cuts in the UK and Europe substantially eased interbank lending conditions this morning.
European and American CDS spreads up again
The cost of credit protection on European banks continued to widen in early trading today as quarterly profits plunged across the board.
BoE announces 1.5% rate cut
At 1200 GMT, the Bank of England (BoE) announced a 1.5% reduction of the official bank rate, while interbank lending rates fell further.
Kaupthing debt set at 6.625% and 2.375%
Senior debt on failed Icelandic bank Kaupthing has been settled at 6.625% and subordinated debt at 2.375% in a credit event auction on November 7.
CDS spreads move out on financial institutions
The cost of credit protection on UK banks widened in early trading today, following falls in equity markets across the globe yesterday.
DTCC launches weekly CDS update
The Depository Trust and Clearing Corporation (DTCC), the largest derivatives clearing house in the US, released its first weekly snapshot of the credit derivatives market yesterday.
Ted spread and Libor drop again
Confidence in the interbank lending markets improved today, with the Ted spread and Libor continuing to fall.
Ambac and MBIA record heavy Q3 losses
Battered by mortgage-related positions and credit losses, bond-insurance companies Ambac and MBIA both took a hit in the third quarter.
Glitnir debt settled at 3% and 0.125%
Another failed Icelandic bank, Glitnir, has seen its senior debt settled at 3% and subordinated debt at 0.125% in a credit event auction today.
CDS losses hit Swiss Re
Swiss Re, the world’s second largest reinsurer, has reported a third quarter net loss of SFr 304 million ($262 million) after being hit by heavy mark-to-market writedowns on its structured credit exposures.
UK CDS spreads widen
The cost of credit protection on UK financial institutions increased in early trading this morning, though market sentiment towards US banks improved on the eve of the presidential elections.
US and European CDS spreads tighten
The cost of credit protection on eurozone financial institutions dropped this morning, with markets continuing to stabilise after recent government interventions.
Landsbanki bonds settled at 1.25% and 0.125%
In an auction to cash-settle credit default swaps (CDSs) tied to Icelandic bank Landsbanki, recovery rates on its senior and subordinated debt were set at 1.25% and 0.125% today, respectively.
Interbank markets remain stable
Confidence in the interbank market climbed today, reflected in the decline of the Ted spread and Libor rates.
November target for CDS central counterparty
Dealers have pledged to the Federal Reserve Bank of New York to begin using a central counterparty for clearing credit derivatives by the end of November.
CDS spreads stable after quiet weekend
The cost of credit protection on eurozone financial institutions remained stable this morning, with recent government interventions boosting market confidence.
Ted spread and Libor continue to fall
Interbank confidence continued to rise today, reflected in the fall of the Ted spread and certain Libor rates.