We’ve fallen back to 1.3205-ish after the warning from the Greek government that it could impose collective action clauses on bondholders to get them to go along with the restructuring. That would bring credit default swaps back into play.
You have to assume that those who’ve written credit default swaps are hedged but we would have assumed Lehman and AIG would have gotten their ducks in a row after Bear Stearns. We all know how that one turned out…
US yields are marginally firmer after the stronger than expected US data, 10-year notes are now at 1.985%.
