Coronavirus

Latin America bond issuers and investors were thrown deeper into the coronavirus crisis on Monday, with Friday’s spread tightening more than cancelled out as the US Federal Reserve’s surprise 100bp rate cut on Sunday failed to arrest a fall in risk assets.

The UK government will announce a rescue plan for businesses on Tuesday after the prime minister changed guidance on dealing with the Covid-19 coronavirus the day before. But corporate bond bankers and investors believe it will do little to stop corporate bond prices from languishing.

Market participants are debating whether the EU is responding quickly and strongly enough in the coronavirus crisis, after the bloc put off the question of how to involve the European Stability Mechanism on Monday evening.

The Bank of Japan (BoJ) has joined a growing number of central banks around the world rushing to solve a problem that is not monetary in nature. Their actions are understandable — but the BoJ offers a clear example of the limits of monetary policy to solve real-world problems.

Central banks are dusting off the 2008 playbook, thrusting liquidity at the banking system and hoping some of it gets through to banks' end clients. It’s better than nothing, but the coronavirus crisis one primarily of corporates — and the rescue toolkit needs updating.

A Ring dealing member of the London Metal Exchange has been diagnosed with the Covid-19 coronavirus, as exchanges around the world adapt to its disruption.

The volatility gripping markets shows no signs of abating, in spite of the best efforts of central banks. Syndicate desks are hard at work, planning how best to bring SSA deals to such a difficult market.

The European Stability Mechanism could guarantee loans across the eurozone and as a result significantly increase its annual funding programme in response to the Covid-19 pandemic, according to analysts at Rabobank.

KfW is exploring whether it needs to increase the size of its annual capital markets funding programme after outlining plans to expand its lending to help companies affected by the coronavirus pandemic.

The commercial paper market is emerging as a source of stress as financial markets creak under the pressure of the coronavirus crisis. This happened in the 2007-9 financial crisis too, but this time the strains are different. Market participants want central banks to act.

Corporate bond syndicate bankers are telling issuers that the best way to approach the primary market for now is to stay away, as spreads swoop to their widest for years. However, some investors are still open to buying deals at the new levels, and issuers are watching closely.

Private debt funds in Europe may be the hot new thing to some in capital markets but they could be about to come of age, having never been through a serious credit downturn before. The market is under scrutiny over how it will cope with the credit ramifications of Covid-19.