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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: maceng2 who wrote (73485)	5/13/2010 4:02:04 AM
From: Haim R. Branisteanu	Read Replies (1) \| Respond to of 74559

DJ West Europe Sovereign Debt Insurance Costs Continue To Fall LONDON (Dow Jones)--The cost of insuring Western European sovereign debt against default continued to fall early Thursday, extending this week's strong rally sparked by Monday's European Union announcement of a support package for member states in difficulty, and the European Central Bank's decision to buy government bonds. The iTraxx SovX Western Europe credit default swap index, which lets investors buy or sell protection on 15 developed European sovereign borrowers, tightened four basis points to 105 basis points, figures from index owner Markit showed. Greece's five-year sovereign CDS were 17 basis points tighter at 495 basis points, Portugal's were 8 basis points tighter at 190 basis points, while Spain's tightened one basis point to 142 basis points, and Ireland dropped to 155 basis points, seven basis points tighter, according to Markit data. U.K. five-year CDS were 3.5 basis points tighter at 74 basis points, following the formation of a coalition government. CDS function like default insurance contracts for debt. If a borrower defaults, the protection buyer is paid compensation by the protection seller. Each basis-point rise or fall in the price of five-year CDS represents a $1,000 increase or decrease in the annual cost of insuring $10 million of debt for five years. -By Mark Brown, Dow Jones Newswires;