Indices widen as ‘cold turkey’ market dries up
The mood in bank funding markets was despondent on Wednesday, as Italy’s bond yields crept back above 7% and indices widened. Secondary flows were scant in senior unsecured FIG paper, and while RCI Banque — an issuer that syndicate desks generally treat as a corporate — launched a two year deal at 4%, bankers agreed that there was little chance of financial institutions coming to market.
The market has emerged from its cold turkey state and is totally dry, said Suki Mann, credit strategist at Société Générale. In fact, there is negative liquidity that is, you can only sell what you havent got and buy what you dont need.
After tightening earlier in the
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