Derivs - Credit

Credit Suisse, after two consecutive quarters of losing money, has surprised market participants with an earlier than expected return to profitability.

An auction to settle senior credit default swaps referencing the Commonwealth of Puerto Rico will take place on August 17, the International Swaps and Derivatives Association’s Determinations Committee has agreed, following the US territory’s failure to pay credit event.

The costs incurred to centrally clear derivatives trades could be greater than transacting them bilaterally, US government researchers have argued, in findings that would deal a blow to regulators’ attempts to curb systemic risk in the global market.

IHS Markit has launched indices that track US dollar, sterling and euro investment grade infrastructure corporate bonds, as well as US dollar high yield infrastructure names.

The surging rally in credit markets since the start of the month hit an impasse this week, as trader caution set in ahead of key policy decisions by the Bank of Japan on Friday and the Bank of England next week.

An auction to settle credit default swaps referencing Portugal Telecom International Finance returned a low final price, but slightly higher than had been indicated by secondary bond and CDS levels despite greater physical settlement interest to sell.

Last week’s failed Turkish coup, and the resulting crackdown, has spooked holders of Turkey’s dollar denominated government bonds.

The chief executive of ICAP’s EBS BrokerTec has stepped down from his post, and is set to leave “in due course,” according to the company.

IHS Markit and the International Swaps and Derivatives Association (ISDA) have struck a deal with the European Commission that will open up access to the rights of their intellectual property, in a settlement over an anti-trust probe that has been ongoing since 2011.

Persistent dislocations between the CDS and cash bond markets are only likely to continue, because of the increased cost of regulations, limited balance sheet capacity at banks, and relative illiquidity in the cash bond markets, according to a staff report from the New York Federal Reserve.

US territory the Commonwealth of Puerto Rico has triggered a failure to pay credit event, the International Swaps and Derivatives Association’s Determination Committee has ruled after a week of deliberation.

The iTraxx indices are set to benefit from the increasing likelihood of a compromise between Italian authorities and the EU over a bailout or recapitalisation of its banks, as well as the support the European Central Bank’s purchase programmes are giving to cash bonds.