By Davide Barbuscia NEW YORK (Reuters) -Spreads on U.S. government credit default swaps (CDS), market-based gauges of the risk of a sovereign default, ticked lower on Monday amid market optimism that the longest federal government shutdown in U.S. history may be coming to an end. Five-year CDS spreads declined to 37 basis points, their lowest since […]
Business
US government credit default swap spreads tick lower
Audio By Carbonatix
By Davide Barbuscia
NEW YORK (Reuters) -Spreads on U.S. government credit default swaps (CDS), market-based gauges of the risk of a sovereign default, ticked lower on Monday amid market optimism that the longest federal government shutdown in U.S. history may be coming to an end.
Five-year CDS spreads declined to 37 basis points, their lowest since February, from 39 on Friday, according to S&P Global Market Intelligence data. Spreads also declined for one-year and six-month CDS, the data showed.
The current government shutdown is not linked to debt ceiling concerns, which is when U.S. government CDS spreads typically rise due to fears politicians may not find an agreement before a sovereign default. Still, CDS spreads had widened when the shutdown began on October 1.
(Reporting by Davide Barbuscia, Editing by Nick Zieminski)