North Korean Uproar Fails To Dent CDS
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North Korean Uproar Fails To Dent CDS

North Korea's missile launch was the talk of the region's markets last week and jittered equities but the uproar had limited effect on Asian credit-default swaps.

North Korea's missile launch was the talk of the region's markets last week and jittered equities but the uproar had limited effect on Asian credit-default swaps. "This blew over in about 15 minutes," said a senior trader at a European house without irony. He explained Korea sovereign protection moved out about two basis points mid-week after the news but tightened back in within an hour or so. Five-year protection was trading around a 28 basis point mid-market as DW went to press Thursday.

"This was written off--we've seen this story before," explained the trader. An official at UBS added there was more volatility a month ago in Korean names when the story first broke. "People that were scared pulled out then," he noted.

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