Bloomberg Surveillance · Thursday, August 13, 2026
Credit default swaps (CDS) are considered a directional barometer of market sentiment but not a direct indicator of a company's stress. The CDS market allows for quick positioning due to its synthetic nature, but synthetic indices are equal-weighted and may not reflect the broader bond market.
“It's a directional barometer on sentiment, But I do not think that it is indicative of a company.”
“I think it's easy to put a position on in the CDs market because you don't have to go and locate the bond to trade it, which is different.”
“It's moving with sentiment though, Tom, I think it's important to track in terms of a directional barometer on sentiment.”