Banque PSA alert to short-end rally

Banque PSA is returning to the short end of the market today and has built a book of over Eu3.5bn for a Eu750m two year deal. The trade is likely to price at 195bp to 200bp over mid-swaps, yet comes only two weeks after the auto finance firm issued Eu500m of 18 month paper at 235bp over. Although the momentum in the market slowed last week, it now seems that the rally is back on track: both a Eu700m 15 year deal from KPN and a Eu750m four year trade from Anglo-American that priced yesterday have performed well in the secondary market. To find out which how all the deals in the market this week fared, read EuroWeek this Friday.