(Reuters) – British five-year credit default swaps slipped to 18-month lows on Wednesday, according to IHS Markit, benefiting from opinion polls showing a hefty lead for the ruling Conservative party in Dec. 12 elections.
The Conservatives are viewed by some as more market-friendly than opposition Labour and has also pledged to take Britain out of the European Union by Jan. 31, potentially reducing the Brexit uncertainty that has been a drag on business sentiment.
IHS Markit said the CDS, used to insure exposure to a credit, were at 22 basis points, down 2 bps from Tuesday’s close.
Five-year UK CDS have fallen 12 basis points since early-September as it became clear no-deal Brexit was unlikely and are down 3 bps this month as the Conservatives consolidated their lead.
(Reporting by Sujata Rao; editing by Karin Strohecker)