CDS Players Brush Off Syria

The iTraxx Main rose just six basis points to 107 bps yesterday reflecting temporarily improved liquidity in light of U.S. Senator John Kerry’s promise of military intervention over the use of chemical weapons in Syria. However, the widening is unlikely to continue, according to Juan Valencia, credit analyst at Société Generale in Paris. “This is more a case of poor liquidity and some players wanting to push the indices wider, so people take advantage of the risk aversion,” he said. Valencia also said that geopolitical tensions have historically not been great drivers of long term widening in European credit indices.