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UK Downgrade Leads to a LOWER Yield Curve and CDS Prices
Confounded Interest ^ | 03/04/2013 | Anthony B. Sanders

Posted on 03/04/2013 4:18:23 PM PST by whitedog57

Yes, on February 22nd Moody’s 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 Moody’s downgrade, or UK’s 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.

TOPICS: Business/Economy; Government; Politics
KEYWORDS: bonds; cds; moodys; uk
The neverending destruction of the dollar.
1 posted on 03/04/2013 4:18:32 PM PST by whitedog57
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To: whitedog57

So, Anthony.
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?

2 posted on 03/04/2013 4:31:58 PM PST by humblegunner
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