After a rip-roaring start to the bond market this week, we take a look at just how good it is for issuers and what has driven the huge volumes. Sure, the Epiphany holiday on Tuesday pushed issuers to do their euro funding in a particularly narrow window, but greater forces are at play across the rest of the market.
We examine that issuance through the prisms of the sovereign, supranational and agency bond market and also that for CEEMEA issuers. We explain why carrot and stick are driving the latter group to fund at such speed.
One of those factors is geopolitical shocks and this week the US provided at least two. It arrested the Venezuelan president Nicolas Maduro and said it would "run" the country instead of him. That raised fears that it might try the same in Greenland. We make the case for why this should drive the EU to push the euro's status as a global reserve currency.
Finally, we look into Venezuela's vast debts — the bits we can see at any rate — and discuss the likelihood of restructuring now that Maduro is gone.
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