FILE PHOTO: People walk by the Federal Reserve Bank of New York in the financial district of New York City, U.S., June 14, 2023. REUTERS/Shannon Stapleton/File Photo

By Davide Barbuscia

NEW YORK (Reuters) -Spreads on U.S. government credit default swaps (CDS), market-based gauges of the risk of a sovereign default, ticked lower on Monday amid market optimism that the longest federal government shutdown in U.S. history may be coming to an end.

Five-year CDS spreads declined to 37 basis points, their lowest since February, from 39 on Friday, according to S&P Global Market Intelligence data. Spreads also declined for one-year and six-month CDS, the data showed.

The current government shutdown is not linked to debt ceiling concerns, which is when U.S. government CDS spreads typically rise due to fears politicians may not find an agreement before a sovereign default. Still, CDS spreads had widened when the shutdown began on October 1.

(Reporting by Davide Barbuscia, Editing by Nick Zieminski)