CDS "Speculators" Focus Their Attention On Italy, Germany And Brazil In Prior Week
After France, Spain and Italy were the main net notional movers in the prior week, the fear about the Eurozone continues, only this time spreading increasingly to the core. While the Italy move of over half a billion in net notional increase is not surprising, as many perceive the nation as the next weakest link after Greece and Portugal, the German spike is a little surprising, although less so when one considers the failed 30 year Bund auction yesterday. Other countries that fill out the list of top 10 deriskers in the prior week include Brazil, Russia, Japan, Kazakhstan, Greece (yup, they're back), and the UK, which made the 10th spot, as CDS traders finally focus on arguably the most troubled "developed" country in Europe.
On the other side, top reriskers were Turkey, Ukraine, and the US, which according to DTCC saw a $39 billion net notional increase on exactly zero contracts. We are not sure how that works but whatever. It's too complicated and so must not be regulated or touched as else it will all blow up. Just ask ISDA.
Full list of all sov and muni names below in pdf: