Americas

Not content with pricing the first regulated Canadian covered bond in euros and the first regulated benchmark in US dollars, the Royal Bank of Canada is now marketing its first Australian dollar covered bond benchmark.

Core European covered bonds were supported on Thursday despite recent downgrades. But weaker Spanish names were under pressure on concerns that the European Central Bank could be poised to reconsider the repo treatment of covered bonds relative to ABS. Meanwhile, primary hopes were hit after it emerged that programme documentation delays could cause Canadian Imperial Bank of Commerce (CIBC) to launch its benchmark in September rather than next week.

Royal Bank of Canada has reopened the Canadian covered bond market with the first deal to comply with new covered bond legislation that the country put in place late last year. The landmark $1.75bn trade was the first Canadian covered bond of 2013 and is likely to be followed by a series of other deals — although these may not now emerge until September.

Players in uncleared derivatives are undecided whether to stay in the market because the rules for margin on the trades have still to be set, according to Biswarup Chatterjee, global head of electronic trading at Citigroup in London.

Canadian Imperial Bank of Commerce (CIBC), which is roadshowing for a euro covered bond, has the potential to price inside last week’s deal for Quebec, bankers told The Cover on Monday. Bankers do not expect covered bond issuance from European banks until the end of August at the earliest. The market has barely reacted to Friday’s downgrade of France by Fitch and in some cases, spreads have actually tightened.

Canadian Imperial Bank of Commerce is set to be the first Canadian bank to issue a deal using the country’s new legislative framework after it mandated banks for what is most likely to be a euro denominated transaction.

Canadian banks are set to bring new covered bonds after US and Canadian regulators cleared the way for three issuers on Wednesday. The covered bond programmes of Canadian Imperial Bank of Commerce (CIBC) and Royal Bank of Canada (RBC) have been activated by the Canadian Mortgage and Housing Corporation (CMHC). Separately, Bank of Montreal has moved a step closer to SEC registration.

China and other big emerging economies are slowing down; this will hit some developed markets more than others

One emerging market has escaped the capital outflows that have affected the rest of its peers, a strategist at ING says

Emerging markets are in better positions now than they were in 2008 to withstand external shocks. But some of them are still vulnerable, research finds

Volatility in bond markets has increased since talk about the Federal Reserve's plans to stop printing money. But analysts say look to Japan, rather than the US

Secondary market selling of covered bonds slowed a little on Friday ahead of the US payrolls report. But bankers say the US data won’t make much of a difference as further selling is likely. In the primary market there is concern that if a deal is incorrectly priced, it will add to problems and potentially close the funding window for other issuers