Credit markets freeze up on Australian banks

The global credit crunch is worsening by the minute. Global interbank rates are ripping:

European bank equity is disappearing:

GSIBs have been crushed:

High yield markets are blasting towards 2015 mining GFC peaks:

Led by energy:

Worryingly, investment grade is just as bad:

Locally, Aussie banks have lost access to term funding:

In reality, term debt markets are already shut. We’re just waiting for yields to catch up.

A CDS price of 120bps is roughly the point of insolvency for five year issuance. We’ll likely reach that today.

David Llewellyn-Smith
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