Five-year credit default swaps for South Africa rose the most since March 2009 on Monday, reaching 380 basis points, up 3 basis points compared with Friday, according to Markit. Russian five-year CDS rose 3 basis points, while Turkish five-year CDS rose 2 basis points.
The spread on one-year credit default swaps covering U.S. debt has dropped 7 basis points, to 51, according to Markit Group. The spread reached an intraday high of 75 basis points Wednesday, the highest level since July 2011. Five-year CDS have dropped 5 basis points, to 32.
Five-year credit default swaps for State Bank of India have jumped 45 basis points from their close Friday, to 351 basis points, the highest level in 14 months, according to Markit Group. The increase comes as India's rupee hits a record low against the U.S. dollar. "The CDS move is understandable," Societe Generale analyst Guillaume Salomon said. "When the currency is under pressure, it raises the question of how they will finance the deficit, hence the reason CDS is widening."
The premium on South Korea's five-year credit default swap eased to 0.85 percentage point July 26, down sharply from 1.17 percentage point high mark at the depth of the turmoil in global markets, according to the Korea Center for International Finance. The higher premium has deterred Korean companies from issuing bonds denominated in foreign currencies since May.
Anti-government protests have pushed the cost of insuring Turkish debt to the highest level since November. Five-year credit default swaps are up 7 basis points, to 148, according to Markit Group. Although Deputy Prime Minister Bulent Arinc's apology for police violence has eased tension, peaceful demonstration can still harm the business community, one expert says.