Greece is playing catch-up to Iceland, and the usual suspects are widening.
Markit’s Otis Casey wrote this CDS report
In terms of what is moving in the credit markets, sovereigns continue to be a major theme. Greece CDS spreads gapped wider today following the downgrade of the sovereign’s debt by Standard & Poor’s. Bid-offers on both the five and ten year Greece CDS were in the 265-270 bp context, 31 and 24 bp wider versus yesterday’s levels, respectively. Market sources indicate that there was heavy volume. There was some reports that protection buyers were taking profits. Some of the other European sovereigns also started widening on thoughts of contagion. Notables wideners were Italy, Spain, Portugal and Ireland at 12, 11, 10 and 8 bp wider at the five year point, respectively. However, the stalwart of the bloc, Germany, was virtually unchanged to a basis point wider in late trading.
via FT Alphaville.
It’s only a matter of time before we see some real events/shocks to the system in response to this situation.
‘Til then, the beat goes on…