Americas

Car parts distributor LKQ is set to become the first US company this year to issue a high yield bond in euros — and more US names may be on their way, bankers say.

The US Securities and Exchange Commission has a chance to examine its conscience over plans to curb derivatives use. It should do so after the industry condemned a sweeping approach that revealed little comprehension of the many sensible interactions that exist between derivatives and everyday capital markets.

UBS has joined a growing list of European banks ramping up their senior holding company level issuance in 2016, printing a large three tranche deal in dollars as demand for the product surges.

Recent actions by the European Central Bank and US Federal Reserve, along with more buoyant commodity prices, have reined in a long running market dislocation, with the basis between credit default swaps and cash bonds having tightened during March.

The vitality of the covered bond market was in no doubt over the first quarter of 2016 as volumes reached their highest level in five years.

The European Securities and Markets Authority (ESMA) has slammed the Depository Clearing Corporation’s Derivatives Repository on several counts for delays over data access, but served up a €64,000 fine for the breaches — a figure that amounts barely to an office whipround.

Investments into emerging market equity exchange traded funds have slumped this year, but this has left call structures and outperformance options looking cheap if Chinese capital outflows ease.

Monetary policy and declining oil prices caused unusual currency correlations in recent quarters, say bank analysts, but changes in sentiment around developed market currencies and the prospects for US inflation look set to send those measures back toward normal levels.

Three large Brazilian real denominated MTNs issued by Export-Import Bank of Korea (KEXIM) indicate that Brazilian investors are making a tax play, according to bankers.

The US Securities and Exchange Commission (SEC) looks set for lengthy deliberation after critics lined up to savage its proposed rule on the use of derivatives. The rule would change the way that mutual funds, exchange-traded funds and other investment companies measure risk, and would limit their use of derivatives in ways that could have sweeping effects across the investment management industry.

Bond bankers have declared an "open runway" for dollar issuance with the Federal Reserve renewing its dovish tone this week, but market participants have warned that macroeconomic concerns are fully capable of haunting credit markets again.

A boost in deal activity in March has brought Latin American year-to-date new issuance volumes back to parity with 2015 as the end of the first quarter draws near, according to Dealogic.