As spreads of all colours blow out due to the perpetually unresolved sovereign crisis in Europe, FT Alphaville has been wondering what non-fundamental factors are driving these moves. The bond market is in some places broken and in other places potentially being driven by regulation.
To the extent that the market for credit default swaps influences the bond market, we ponder the technicals of these derivatives that reference it. Here we look at the role played by trades directly between banks and sovereigns. Read more