Portuguese credit default swaps are roughly 5.5% tighter today today. If you want to insure Portuguese debt, it will cost you 617 basis points today, Irish swaps cost 4.7% less at 632 bp than yesterday while Greek spreads are a more modest 1.3% tighter, at a still-lofty 1322 bp.
Bottom line: The lower the cost of insurance, the greater the market’s confidence in the underlying credits, the better for the euro. EUR/USD has held up remarkably well despite the high likelihood of a Greek sovereign debt restructuring.
