Sensitivity creeps in as sovereigns attack 10 year tenors

The euro market is hot, hot, hot, already absorbing Eu15bn of 10 year supply from KfW, Belgium and Spain — with Ireland still to come. Add a Eu4bn seven year Austria and Eu3bn 15 year Poland into the mix to get a record week of SSA euro issuance. Some price sensitivity is creeping in — Spain has priced at the wide end of guidance at 56bp over mid-swaps and Ireland’s pricing includes a premium of around 15bp while the rest have paid 2bp or 3bp. But all the deals have been executed quickly and have been well oversubscribed. Greece, Finland and the Netherlands are expected to join their peers in the coming week. Read EuroWeek on Friday for opinions from borrowers, bankers and investors.