The cost of insuring Asia-Pacific corporate and sovereign bonds from non-payment decreased, according to traders of credit-default swaps.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan dropped 10 basis points to 187 basis points as of 8:45 a.m. in Hong Kong, Royal Bank of Scotland Group Plc prices show. The gauge is on course for its biggest daily decline since Nov. 30 and the lowest close since May 11, according to data provider CMA.
The Markit iTraxx Japan index fell 8 basis points to 184 basis points as of 9:21 a.m. in Tokyo, Deutsche Bank AG prices show. The benchmark is poised for its largest daily decrease since June 7 and its lowest closing level since May 3, according to CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market.
Markets in Australia are closed today for a public holiday.
Credit-default swap indexes are benchmarks for insuring bonds against default and traders use them to speculate on credit quality. A drop signals improving perceptions of creditworthiness, while an increase suggests the opposite.
The swap contracts pay the buyer face value in exchange for the underlying securities if a borrower fails to meet its debt agreements. A basis point is 0.01 percentage point.
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