Credit Default Traders Now Betting On A European Implosion

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Further criticism of European deficits from the European Commission, plus worries about Greece’s bailout falling apart, are slaughtering sentiment in European credit markets:

The cost of five-year credit protection on Greece saw the biggest movement, widening from 287.7 basis points at the close on March 17 to 313.7bp at 13:30 GMT on Thursday, according to CMA DataVision.

Spreads on other European sovereigns also widened: the cost of credit protection on Italy moved out from 91bp at the close on Wednesday to 96.7bp at 13:30 GMT on Thursday, while UK CDS spreads rose from 69.7bp to 73.2bp, and French spreads widened from 37bp to 40.6bp. Germany bucked the trend, tightening from 35.5bp to 28.5bp over the same period.

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