A Tick Up In German Credit Default Swaps

July 24, 2014

By Knowledge Leaders Team in Uncategorized

Given recent drama among Portuguese financial institutions, we are not especially surprised to see an uptick in the yield on credit default swaps (CDSs):

What is a little more surprising is the move up–small though it may be (so far, anyway)–in CDS for Germany, aka the region’s strongest economy:

Whether or not this can be linked to recent weakness in the common currency is up for debate. However, it is interesting to note the relationship over the last few years where the two tend to move in opposite directions– i.e. the euro falls as CDS rise and vice versa:

Will German CDS continue to rise as the euro tests support at 1.35 (having fallen below its 50- and 200-day moving averages earlier this summer– see here)?

Tags > CDS, credit default swap, Euro, Europe, Germany

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