Europe banks, sovereign CDS rise sharply on tumbling yields, virus crisis

LONDON, March 9 (Reuters) – The rise in costs of insuring exposure to debt issued by sovereigns and banks affected by the economic fallout from the coronavirus, plummeting bond yields and the oil price crash on Monday continued to rise sharply.

Five-year credit default swaps (CDS) for Germany rose 5 basis points (bps) to 18 bps while lender Deutsche Bank saw its CDS jumped 33 bps to 115 bps – both trading at their highest in nearly three years, data from IHS Markit showed.

CDS for Italy’s UniCredit and Intesa Sanpaolo both added more than 50 bps. Both lenders are heavily exposed to Italian government bonds that have suffered sharp falls in price after the country was hit by the worst coronavirus outbreak in Europe.

Swiss lenders Credit Suisse jumped by 34 bps to 119 bps, data showed. (Reporting by Karin Strohecker; Editing by Dhara Ranasinghe)

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