Bonds - EUR
Extensions and risk off helped the euro curve bull-flatten out to 10y. Banks look at the likely impact of the proposed EU Recovery Fund.
After a quiet start to the week, both sides of the Atlantic are seeing strong issuance, with USD supply from non-domestic issuers booming.
Bund asset swaps were a talking point in lunchtime trading as news of grants and loans from the EU’s ERF continue to keep spreads tight.
Yesterday's fast pace of EUR bond issuance continued today with new offerings emerging from BASF, Credit Agricole, Axa and Bpi, among others.
France received €51bn of 20y orders while BTPs eye a big ERF grant. In basis, offers in EONIA/BOR and bids in 3s6s are reported.
France is pricing its 20y syndication. BBVA and CAF are both launching COVID-19 Social bonds.
Asset swap spreads have crunched tighter amid peripheral tightening. Some traders expect EURIBOR fixings to stay elevated until the June TLTRO.
Four names are looking to issue in the 10y sector
A higher 3mE fix vs a drop in 6mE weighed on basis. Banks look at the ERF as a potential issuer.
Optimism continues to weigh on FRA/OIS spreads, while hedge funds eye long-end steepeners.