Sovereign spreads the main swing factor for H2

Covered bond analysts have identified sovereign debt risk as likely to have the most influence on the covered bond market in the second half of the year, with peripheral issuers relegated to the sidelines until their respective government bond spreads have stabilised at tighter levels. However, after the second busiest ever half year for euro-denominated benchmark issuance, most are standing by bullish forecasts made at the start of the year for covered bond supply in 2010.