Basis: Strong EUR supply, but market pretty calm

Perhaps due to Fed and NFP-related distractions, USD issuance has slowed this week, leaving EUR on top. But while EUR/USD is offered, flows are light.

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  • Strong EUR supply, but market pretty calm

  • Flow

  • New issues:


Strong EUR supply, but market pretty calm

Perhaps as a result of being wedged between two Washington testimonies by Fed Chair Powell on Tuesday and Wednesday, and non-farm payrolls, today looks like being an unusually slow Thursday for basis-swappable USD issuance, while such issuance in EUR appears to be booming, while not setting the basis swaps market alight.


One long-standing basis swapper said this lunchtime that “it’s a bit boring, we’ve seen a lot of EUR issuance again today but I’m not sure how much of it has been swapped, it’s been quite quiet in the market with EUR/USD just drifting lower and not much to report.”


He said the reason for the recent dominance of EUIR supply over USD wasn’t immediately obvious, “it must be OK to swap (from EUR to USD) but generally it’s just been the normal trend of more USD issuance up to 3y or maybe 5y, with EUR doing a bit better further along the curve. This week though it’s just been quieter in USD.”


He said that today had seen decent flow in 4y EUR/USD at -22.625bps, just 0.25bps lower than yesterday’s close and its current mid-price, and while 5y is (as is typical) more active issuance-wise than 4y in EUR today, there was a deal in 4y from Kiwi bank ASB last night and UBS is planning a 5y NC4 offering today.  


Sources also highlighted 4y activity in EUR/USD yesterday, with Kommuninvest’s €500m, 4y Green Bond yesterday said to have driven strong 4y offers in basis, suggesting it is reasonable to think that the ASB deal might be adding to lingering offers there today.


And deals in 5y EUR yesterday from Nationwide and Westpac yesterday were said to have kept the 5y sector well-offered while curve steepening this week has speculatively been attributed by one source as a function of UK real money accounts paying EUR/USD and receiving cable.


Today curve-steepening in EUR/USD was minimal, with the 1y sector continuing to normalize with a 1.375bps push higher to -9.375bps at the time of writing, while 5y is -0.375bps at -23.125bps, 10y is -0.5bps at -24.375bps, and 30y is -0.25bps at -12.875bps, steepening 10s/30s by 0.25bps to +11.5bps on a day when light offers really dominated the curve.  


In cable, a 0.75bps move more negative yesterday has been more than reversed via a 1.375bps skip higher so far today to -27.875bps as the 30y bounces from near the bottom of its -20bps to -30bps range for 2023 so far, in what traders say is a low volume session so far. No 30y cable flow was reported though 20yh (also +1.375bps on the day) did trade in fairly modest size today at -25.875bps on its way up to its current level of -24.875bps.



Basis trades on the SDR can be seen here: Total Derivatives. Note that the data now shows which broker/platform handled the trade, where available. 


New issues:

USD new issues:

  • Turkey yesterday priced a $2.25bn, Mar 9.375% 2029 bond at USTs +517bps via Deutsche, HSBC and JPM.


EUR new issues:

  • UK-listed Anglo American plans €500m long 5y and €500m 8y bonds at swaps +140 and 190bps. Leads are ANZ, Barclays, BofA (B&D) and CA.


  • Australian logistics firm Brambles Limited plans a EUR 8y Green bond after meeting investors from Mar 10. Leads are BBVA, BNPP, ING and Commerzbank.


  • US flooring company Mohawk Industries is preparing a €500m 5y after meeting investors from Mar 10. Via BNPP, BofA and JPM. 


  • UBS Group is preparing €1.5bn 5y NC4 and €1.25bn 9y NC8 bonds at swaps +115 and 160bps. Leads are ABN Amro, BBVA, Erste, SEB and UBS.


  • Landsbankinn is preparing a €300m 5y Icelandic Covered bond at around swaps +90bps. Leads are Barclays, Natixis and UBS.


  • Global Payments, a US company, yesterday sold a €800m 8y at swaps +170bps through BofA, JPM (B&D) and Barclays.


  • Northwestern Mutual, a US insurer, yesterday priced a €500m 7y FA backed at swaps +85bps through CS (B&D), DB and JPM.


  • Nationwide BS yesterday priced a €1bn 5y Covered bond at swaps +24bps through BNPP (B&D), HSBC, LBBW, NordLB and UBS.


  • Westpac Securities NZ yesterday priced a €750m long 5y Covered at swaps +44bps through Citi (B&D), HSBC, UBS and Westpac.


  • Kommuninvest yesterday priced a €500m 5y Green at swaps -8bps through Citi, SEB (B&D), Handelsbanken and TD.


  • US auto parts firm Autoliv Inc yesterday priced a €500m 5y Green at swaps +95bps through Mizuho (B&D), MS and SEB.


  • New Zealand’s ASB Bank yesterday priced a €500m 4y at swaps +110bps through Barclays (B&D), CBA, SocGen and UBS.


AUD new issues:

  • Lloyds Bank is planning a 6NC3 fixed- and/or floating-rate Kangaroo bond offer with initial price thoughts at around +200bps over AUD 3M BBSW/ASWs.


  • Toronto-Dominion Bank raised AUD2.5bn via selling the following March 16, 2026 covered bonds, consisting of; AUD950m, 4.5% and AUD1.55bn paying AUD 3M BBSW + 70bps. Leads are ANZ, CBA, NAB, Nomura, TD Securities and Westpac.