Bonds News

Russia CDS hits 8 mth high, bond spreads widen as Russia-U.S. tensions rise

LONDON, April 11 (Reuters) - The cost of insuring exposure to Russian debt rose to a new eight-month high on Wednesday and dollar bond yield spreads widened following a spike in tensions between the United States and Russia.

Tensions between Moscow and Washington escalated after Russia warned that any U.S. missiles fired at Syria over a suspected chemical weapons attack would be shot down. U.S. President Donald Trump said Russia should “get ready” and missiles “will be coming.”

Russia’s five-year credit default swaps rose to 162 basis points (bps) according to IHS Markit data, up 11 bps from Tuesday’s close to the highest since early August 2017.

The average bond yield spread of Russian sovereign bonds over safe haven U.S. Treasuries on the JPMorgan EMBI Global Diversified index also widened 7 bps to 242 bps. (Reporting by Claire Milhench, Editing by Abhinav Ramnarayan)