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CDS UPDATE: DM & EM...........>

GLOBAL MARKET/OPINION
GLOBAL MARKET/OPINION: CDS UPDATE: DM & EM political risk plays have generally
seen a reduction in risk premia since the beginning of the year.
- The UK 5-year benchmark is down ~6bp YTD, Italy is trading in line with the
start of the year but down ~80bp from the November high, while the Greek 5-year
CDS has traded down ~90bp YTD. Among the EM majors, significant YTD spread
narrowing has been seen in Turkey, South Africa, Brazil, Mexico, Russia, India,
Korea and Argentina.
- In some cases the improvement in risk-sentiment is case specific (no-deal
Brexit risk dialled back in the UK, Italy budget politics dying down) and in
others it reflects the dovish shift in global mon pol which has trumped global
growth concerns in driving risk premia lower.

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