EUR Swaps: Big issuance; Dutch pension reform delay?

Big issuance; Long-end receiving
Global fixed income is once again selling off with the 10y Bund yield earlier testing the 2.50% (+4bps) level while the euro swap curve has bear flattened. Earlier, the session began with Eurozone PMIs printing slightly lower-than-consensus with the composite at 53.3 vs 53.5, down from 54.1 the previous month.

“It’s the US debt ceiling abroad and then issuance (in euros) that we are mainly trading at the moment,” said one euro swapper.

In terms of issuance, a steady stream of deals continues to hit the screen with Italy’s €4bn inflation-linked 15y one of today’s stand out deals and a possible candidate for asset swapping. Other names pricing include a €3bn three-part Bayer deal, €2bn 10y AFD and €1bn NRW Bank 7y Green.

Bund asset swaps are mixed with the spread curve slightly flatter and last prices putting the Schatz at 80.6bps (+1.6bp), Bobl at 73.0bps (unch), Bund at 67.8bps (-0.4bp) and Buxl at 30.3bps (-0.3bp).

Elsewhere, the euro swap curve has seen more flattening in the longer-end with 10s/30s last -37bps (-1bp). Note that following recent steepening across 10s/30s there has been speculation there could be a near-term pullback as real money accounts look to receive. “There’s been a bit of opportunistic but nothing major at these levels,’ one trader reported.

Dutch pension reform deadline pushed back to 2028?
The newswire fd.nl today reports that the deadline for Dutch pension funds to switch to the new pension system is likely to be delayed by one year to 1 Jan 2028 from 2027, with the government prepared to monitor whether further delays are needed, even to 2029, following calls from some parties in the Dutch parliament and concern about capacity at advisors and regulators to handle the change. Further details can be found here. A vote on the pensions act is expected on May 30, with the reforms to be introduced from 1 July 2023.

For more background on Dutch pension fund reforms see Dutch election and pensions, Dutch pension fund changes in 2023 and Dutch pension fund law and long-end. 
 

ESMA WG on risk-free rates winding down
The minutes from the 3 April ESMA Working Group on Euro Risk-Free Rates meeting have been released and include an update on the future of the Working Group (WG). The WG plans to hold two further meetings this year before concluding its programme. Ahead, it plans “to keep the network and contact lists of stakeholders for ad-hoc activities related to benchmarks” such as surveys.

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