Key Eurozone CDS Spreads Hit 2012 Lows
Sober Look | Sep 10, 2012 02:51AM ET
The eurozone sovereign credit markets saw unprecedented declines in key CDS spreads last week. The spreads are now below the levels reached after the 3y LTRO programs were put in place.
It seems that a number of hedge funds were long sovereign debt protection (short the credits) and have finally capitulated last week. As Reuters : German judges, Dutch voters, IMF inspectors and Brussels regulators could all spring surprises that make it harder to resolve a sovereign debt crisis which is almost three years old and weighing on the world economy.
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