The European Corporate Bond Market
Expert bond market daily comment from independent credit strategist Dr Suki Mann PLUS free issuance, spread and performance data charts. For access to subscription-only premium insights direct to your email inbox, sign up here.
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Draghi the Tinkerman is back
The Bund yield reacted to the ECB and immediately steepened. The 2-year yield fell to -0.77% (-7bp) while the 10-year closed (off the highs) at 0.38% (+4bp). Italian yields rose, the 10-year BTP left at 1.99% (+11bp) while the equivalent maturity Bono closed yielding 1.50% (+8bp). Portuguese government debt was the day's underperformer, the yield on the 10-year at 3.70% (+2 [...]
Nervous markets expect
Going into the ECB meeting, the markets were cock-a-hoop about something. There were risk-asset/safe-haven rallies all around. Why the sudden extended optimism in stocks which also saw government bonds rally? The former was likely derived from the potential for a bail-out for Monte dei Paschi (according to reports) and the latter from rising expectations that the ECB will e [...]
Time to pack up
The non-financials IG new issue market saw just Zimmer Biomet in a 2-tranche offering for €1bn with both of them priced 10-15bp inside the initial guidance. Aroundtown Property was back for another €500m, but owing to its status as a REIT, doesn't make the non-financial index. They managed to price just a few basis points inside the initial price talk which was understa [...]
Interestingly, they haven't lifted much more than the average €1.85bn on too many occasions. Judging by some of the (out)flows, we think they could easily have taken more down. Perhaps there is an implicit understanding that a range of €2-2.5bn is about the most they will lift in any given week. Markets expecting great things from the US Non-manufacturing ISM activity [...]