Traders cut covered bond inventory and anticipate slender premiums next year

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By Bill Thornhill
25 Nov 2020

Covered bond traders are paring back inventory as they approach the end of the year, though there are a few sectors of the market where they intend to hold positions. High redemptions in the first half of the year will support spreads but January’s issuance glut may not see a rise in new issue premiums.


Cutting down on inventory is usual practice but this year, traders may be less inclined to sell to the same extent as previous years with their product in such high demand. 

Bonds eligible for the ECB's Covered Bond Purchase Programme can be easily placed there and, in general, ...

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