Volkswagen bond and CDS blowout overdone, say traders

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Volkswagen bond and CDS blowout overdone, say traders

volkswagen 230x150
A sign with the Volkswagen logo stands in front of a VW car dealer in Hanover, Germany, 20 February 2014. On Friday (21 February 2014) a supervisory board meeting takes place. In the previous year first operating numbers have been submitted for the expired business year. Photo: Julian Stratenschulte/dpa | Julian Stratenschulte/DPA/Press Association Images

A near tripling of Volkswagen credit spreads on Monday and Tuesday this week, along with a sharp widening of other names in the European autos sector, is a kneejerk reaction that is likely to be corrected soon, according to some traders and strategists.

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