EUR Swaps: New issuance dominates amid US holiday

Equity Graph
New issuance was the main focus for euro traders today amid the US Presidents Day holiday.

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  • New issuance dominates amid US holiday
  • Hold Schatz ASW tightener - Commerzbank
  • New issues

    New issuance dominates amid US holiday
    New issuance was the main focus for euro traders today amid the US Presidents Day holiday.


    Among the issuers are several corporates including Tesco, Kering, Roche and Unilever plus Australia's NBN. Also today, ESM is pricing a €3bn 5y while CADES has mandated banks for EUR 7y Social bonds. “It’s kept the market ticking over in an otherwise quiet session,” said one euro swapper.

    Bund asset swap spreads are a touch wider across the curve with last prices Schatz at 66.3bps (+0.9bp), Bobl at 64.3bps (+0.7bp), Bund at 59.3bps (+0.5bp) and Buxl at 26.8bps (+0.9bp).


    Meanwhile, one trader agreed that a characteristic of new issuance over recent weeks has been a widening bias in asset swap spreads as investors buy new deals via ASW, “It certainly seems that way,” he said.

    Elsewhere, the Bund future has so far traded a narrow 41 tick range and was last up 20 ticks at 135.09 while the 10y yield was marked unchanged at 2.44%.

    The euro swap curve was slightly flatter across the belly with last prices 2s/5s at -38.5bps (-1bp), 5s/10s at -13bps (-0.5bp) and 10s/30s at -52bps (unch).

    Looking ahead, euro final inflation data is published on Thursday, “I don’t think there’s scope for too much of a shock, but you never know as markets have been exhibiting intra-day volatility recently,” said one dealer.

    In sovereign supply, Spain has announced plans for a EUR long 15y syndication through DB, JPM, MS, Nomura, Santander and SocGen.


    Hold Schatz ASW tightener - Commerzbank
    In its weekly rates research Commerzbank looks at trends in the repo market and holds its Schatz ASW tightener. It writes:

    • “The seamless transmission of the 50bp hike into Bund repos is being compounded by the ECB's very generous forward fixing of the price of sovereign cash. As a consequence, the broad cheapening of German spot collateral is accelerating and our specialness spread vs. €STR has compressed to the tightest level since Dec-21.

    • “Resilient Schatz-ASW spreads and still elevated repo scarcity term premiums point towards second thoughts on the ECB's sovereign deposit remuneration, however. We doubt that these will materialise and reiterate our ASW tightener. In futures, net basis are converging towards zero as usual at this stage of the contract cycle without CTD (tail) risks.”


    New issues

  • Spain plans EUR long 15y through DB, JPM, MS, Nomura, Santander and SocGen.


  • Unilever is pricing €500m 8y at swaps +38bps and €500m 12y at +58bps. Leads are BNPP (B&D), BofA, JPM and Standard Chartered.


  • Roche Finance is pricing EUR 6.5y around swaps +20bps and 12y around +40bps. Leads are Barclays, DB (B&D) and Santander.


  • NBN Co Limited, an Australian government broadband company, plans to sell EUR 6y and/or 10y Green bonds through BNPP, Citi, DB and HSBC.

  • Kering, a French retail company, is pricing €750m 6y at swaps +25bps and €750m 10y at +45bps through BNPP, HSBC (B&D), IMI, JPM, MUFG and NatWest.

  • CA Home Loan is pricing €1bn long 3y Covered at swaps +3bps and €1bn 9y Covered at +29bps. Leads are CA, DB, DZ, Erste, Natixis and Santander.

  • Tesco is pricing €500m (max) 8y at swaps +130bps and £250m (max) 12y at gilts +180bps. Leads are BNPP (B&D), Rabobank, Santander and Standard Chartered.

  • ESM is pricing €3bn 5y at swaps -10bps through DB (B&D), NatWest and SocGen. Latest order book size reported to be above €15bn.

  • SEB is pricing €1.5bn long 5y Covered at swaps +15bps through CA, DB, ING, Nomura and SEB.

  • Arcadis plans EUR 5y through BNPP, BofA, GS, ING and Rabobank.

  • NN Bank plans EUR 4.25y Green Covered through ABN Amro, DB, HSBC, LBBW, Rabobank and SocGen.