Covered market on edge as ECB purchases await

By Bill Thornhill
16 Oct 2014

The secondary covered bond market this week found itself caught between a tumultuous peripheral sovereign market and fevered anticipation of the European Central Bank finally wading in to buy bonds. The strong bid, which was seen for periphery names over the last week, had evaporated in the second half of the week as profit taking settled in.

“Right now the covered bond market is unsure of [whether it should focus] on the prospect of ECB buying or the world fundamentally being much worse,” one trader told GlobalCapital on Thursday, “and as a result our market hasn’t been massively affected, as yet.”

Traders reported a weaker ...

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