Surge in trading of UK credit default swaps reflects unease over global trade tensions

From Yahoo Finance: 2025-07-01 12:58:00

Trading of credit default swaps in the UK surged by 47% to $2.3 trillion in the first quarter of 2025, up from $1.5 trillion in 2024, according to the ISDA report. The increase in derivatives contracts reflects unease surrounding global trade tensions, particularly in light of President Trump’s import tariff announcement.

The volume of insurance protection on UK corporate bonds highlights concerns ahead of potential trade deals and tariff uncertainties. Effective U.S. tariff rates have risen from 3% to 13%, impacting inflation, company profits, and consumer spending. Trade tensions remain a top concern for investors, alongside fears of a global recession, according to a Bank of America survey.

European CDS trading saw a 28% increase to $3 trillion in the first quarter of 2025, with UK-reported trades representing 75% of total European CDS notional trading. The rise in activity was primarily driven by index CDS, with the UK accounting for 82% of total trade count. The EU contributed to around 25% of the trading volume.



Read more at Yahoo Finance: Trading on protection against UK defaults jumped in Q1, says ISDA