Reading macroeconomic developments and translating their messages into smart bond funding has become more difficult just lately, especially in Europe. The danger of an inflation flare-up resulting from the war in the Middle East has powered interest rate volatility, raising the difficulty level for credit issuers in particular.
Just when the fossil fuel-starved continent was showing signs of economic recovery after years of anaemic growth, the prospect of a new oil shock struck.
Higher energy prices brought back bad memories of 2022's rampant inflation and the high interest rates used to tame it.
Despite the efforts this week of the International Energy Agency to stabilise oil prices by releasing record 400m barrels of reserves, along with further 170m from the US, rates marched higher for a second week in a row as brent crude got stuck at about $100 per barrel.
The 10 year Bund yield has jumped 30bp since the beginning of March. As of Thursday it was just 5bp shy of hitting 3%, which is its highest level since 2011.
Investors and traders are forward looking, and the price action this week shows a wide belief that rates volatility is here to stay, even if the war ends soon, as energy and transport infrastructure has been damaged.
Banks issuing unsecured debt and investment grade corporates are susceptible to rates volatility when it comes to the primary market.
Such a volatile market makes the so-called go/no-go calls that issuers have with their syndicate of banks before opening order books more important than ever. And it makes picking banks that can offer experienced advice, and that have a closer connection to investors far more valuable than going by league table standings alone, or hiring a syndicate based on favours owed.
But ultimately, all decisions rest with the borrower. Those that can master the volatility and find the right moment of calm in which to issue at the right price will prevail.