💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

Cost of insuring against U.S. default rises to highest since 2009

Published 05/11/2023, 04:57 AM
Updated 05/11/2023, 05:01 AM
© Reuters. FILE PHOTO: U.S. dollar banknotes are seen in this illustration taken March 10, 2023. REUTERS/Dado Ruvic/Illustration
SPGI
-

LONDON (Reuters) - The cost of insuring against a U.S. default rose to its highest since early 2009 on Thursday, in the latest sign of investor nerves over the debt ceiling standoff.

U.S. 5-year sovereign credit default swaps rose to 74 basis points, according to data from S&P Global (NYSE:SPGI) Market Intelligence, up from 73 basis points at the previous close and the highest since March 2009.

U.S. President Joe Biden on Wednesday said a failure to quickly raise the $31.4 trillion debt ceiling could throw the economy into a recession and destroy thousands of jobs.

© Reuters. FILE PHOTO: U.S. dollar banknotes are seen in this illustration taken March 10, 2023. REUTERS/Dado Ruvic/Illustration

Donald Trump, who is currently leading the field for the 2024 Republican presidential nomination, said the party should demand massive spending cuts, or let the U.S. default, playing down the consequences of such an event.

The yield on the one-month U.S. Treasury bill was up 18 basis points on Thursday at 5.705%, reflecting investor concern about the issue. That was shy of Wednesday's peak of 5.811%, which was the highest stretching back to 2001, according to Refinitiv data. Yields move inversely to prices.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.