Wednesday, May 27, 2009

The appetite for risk in Japan continued to grow on Wednesday

TO BE NOTED: From Alphaville:

CDS report: Tokyo trend continues

The appetite for risk in Japan continued to grow on Wednesday, with the benchmark index for the country’s credit default swaps tightening for a seventh consecutive session.

The iTraxx Japan Series 11, which includes the 50 most traded investment-grade entities, ended the day at 165 basis points, ten points lower than late on Tuesday, with some analysts predicting that it could go as low at 150bps on Thursday.

The situation was a lot steadier in Europe, where the cost of insuring against the possibility of corporate default hovered around Tuesday’s closing price, as investors anticipated housing data from the US.

The European iTraxx Crossover index, which tracks the the 45 most liquid names in the junk-rated sphere and had risen above 800bps earlier in the month, was tighter by 1bps at 744bps.

The primary market is likely to see action later in the day, however, with Pfizer, the US pharmaceutical company, following on the heals of a flurry of corporates seeking to raise money.

The world’s largest pharmaceutical group is set to issue a four-part euro and sterling denominated bond, worth €10.6bn.

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