Today's Major Market Move: Austrian CDS Rise 32% in November

The worst performing of individual sovereign CDS for the month of November has been Austria (by worse we mean increasing default risk). Its 5 year CDS have gained 32% since Nov 1. In absolute price terms Austrian debt is still considered relatively safe but Austrian banks have above average exposure to Eastern Europe which has been having issues lately (see our recent post on Hungary). Here's the list of the top CDS price gainers in the current month:

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Austrian equities on the other hand have been relatively flat lately. The Austrian ATX Prime Index has been sitting near the 2011 lows for the last month and a half:

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Austria is one of the few countries in the Eurozone (along with France and Germany) to still be rated AAA however some internal folks have recently expressed some concern about maintaining that rating. From reuters:

Austria has to tighten its belt to preserve its AAA sovereign debt rating and could reduce its stakes in some big companies to cut debt, Foreign Minister Michael Spindelegger said.

"We are heading towards a debt spiral from new and old debt. We absolutely have to avoid getting drawn into this vortex," he told the Kurier newspaper in an interview published on Saturday.

He noted than even a one-notch downgrade would boost annual debt service costs by 3 billion euros ($4.1 billion).