Yield rise raises hope of tighter covered bonds

Yield spread performance trading adobe stock  electronic 230x150 AS
By Bill Thornhill
23 Feb 2021

The outlook for covered bond spreads has improved following this year’s rise in yields, although there is contention over whether the short or long end of the curve is the best place invest.

After NN Bank issued a 20 year deal on Tuesday, one lead manager suggested 2021’s rise in yields had opened the way for the long end of the curve to outperform.

That day, 20 year euro swaps were at 0.39%, compared to lows of minus 0.02% in January, while ...

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