August 11, 2017 / 8:11 AM / 7 months ago

South Korea 5-year CDS at highest since Feb 2016-IHS Markit

LONDON, Aug 11 (Reuters) - The cost of insuring exposure to South Korea in the credit default swaps market rose on Friday to the highest since February 2016, reacting to the sharp increase in tensions between Pyongyang and the United States.

On Thursday, U.S. President Donald Trump said his threat earlier this week to unleash “fire and fury” on Pyongyang, if it launched an attack, may not have been tough enough, triggering fresh falls across world markets and pushing South Korean markets to new multi-week lows.

He spoke after North Korea disclosed plans to fire missiles over Japan to land near the U.S. Pacific territory of Guam.

Data from IHS Markit showed five-year CDS for South Korea at 69 basis points (bps), after closing at 64 bps on Thursday. Five-year CDS have surged 11 basis points this week, the biggest weekly rise since March 2016. (Reporting by Claire Milhench; editing by Sujata Rao)

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