Bonds - EUR
Recent structured deals include another big inflation-linked repack, a century tap and a choice selection of callables.
Bunds are edging up with volumes supported by month end. Banks suggest hedges for a second Covid wave. BNPP and NatWest report FIC, VaR and hedges.
In a year of statistical firsts a flatter basis swaps curve will not earn a ‘Bong’ moment on the ITV news, but gamma flow is weighing heavily upon it.
A lack of new Euro issuance and the Fed keeping rates and the pace of asset purchases unchanged has flattened the Euro curve in risk-off trading.
Two German States and the EIB have combined to ensure today is not a total washout in the EUR new issues market.
A very short list of new euro issues today includes deals from State Grid (China) and Rhineland-Palatinate.
EONIA/BOR and ASWs are tighter in the aftermath of the EU recovery fund deal.
KfW is expected to issue €3bn 8y green bonds while Lithuania is selling 30y via syndication.
MTN issuance over the last 1-2 weeks has included a couple of century taps and a rare sterling callable.
Traders shrug off protracted EU Recovery Fund negotiations. Strategists warn about forward steepeners.