Skip to comments.UK Downgrade Leads to a LOWER Yield Curve and CDS Prices
Posted on 03/04/2013 4:18:23 PM PST by whitedog57
Yes, on February 22nd Moodys lowered the bond rating for UK debt from AAA to Aa1. The result between February 22nd and today? The yield curve for UK sovereign bonds has fallen.
I compare the US Treasury yield curve over the same time period with the UK Sovereign curve. The US yield curve shows a much smaller decline which, of course, was not downgraded. Yet.
The UK 5 year credit default swaps (CDS) has fallen from 51 on February 21st to 47.30 on March 1st.
If you look at the time distribution of UK sovereign debt, they have a big weighting in 2036.
So, either no one is paying attention to Moodys downgrade, or UKs debt problems are well known and already priced, or
enough people believe that The Fed and Bank of England will print till the cows come home.
Do you think you might find something worth posting that you didn’t write yourself?
Or is this wholly a self-promotion operation to you?
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