May 27, 2011
The cost of insuring sovereign debt of weaker euro-zone countries against default stabilized early Friday, with peripheral sovereign credit default swap spreads tightening slightly after comments on Greece by the head of the euro-zone group of finance ministers, Jean-Claude Juncker, had pushed them significantly wider late Thursday.
Five-year sovereign CDS written on Greece, Spain, Portugal, Italy and Ireland were all between two and five basis points tighter Friday, according to Markit.
Greek leaders are meeting today to conjure up fresh austerity plans. And there’s speculation that the European Central Bank will have to back off its tough, no-default stance.
However, Greece’s five-year CDS spreads are still hovering around their record wide levels reached earlier this week on fears that the country may default or at least have to restructure its debt.
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