Currencies

The possibility that former ECB chief Mario Draghi may become the next Italian prime minister has caused excitement among bond market participants and a sharp rally in risky assets.

The Hong Kong Mortgage Corp (HKMC) made a rare public appearance in the debt market this week with a dual-currency transaction worth $1.29bn-equivalent. Featuring a Hong Kong dollar portion and an offshore renminbi tranche, the deal helped the issuer get ‘competitive’ pricing levels, said bankers.

Cyprus attracted sold demand when it hit the market for a new five euro benchmark on Tuesday. The trade was priced with a positive yield – a rarity for a eurozone sovereign bond in this part of the curve.

Portugal mandated banks on Tuesday to lead the sale of a new 30 year bond as it looks to pounce on the strong investor appetite in the long end of the euro curve.

The Singapore Exchange has sold a €240m zero coupon convertible bond, its debut equity-linked issue and the first CB from a stock exchange globally in eight years.

India’s NTPC, formerly known as National Thermal Power Corp, is making a rare venture into the euro loan market.

German politicians are planting their flags, preparing for the leadership tussle that is set to follow chancellor Angela Merkel's departure from the post later this year. Low rates have increased debt's popularity as the means to fund economic stimulus but Germany’s frugality is legendary and now a fight is brewing over relaxing its famous debt brake, writes Lewis McLellan.

First Abu Dhabi Bank issued a Sfr260m ($293m) six year bond this week, the first Swiss franc green bond from the Middle East.

A pair of sovereign borrowers hit the crowded euro bond market on Wednesday, pulling down a combined €7bn. Public sector issuance is showing no signs of slowing: Wednesday’s borrowers received huge orders.

At this year’s Central & Eastern European Forum, Société Générale hosted the workshop titled ‘CEE central banks’ balance sheet expansion: a necessity or a risk?’. The speakers were Radoslaw Cholewinski (deputy head of fixed income at Pekao TFI), Martin Dolejs (portfolio manager, pension fund and insurance portfolios at Allianz), and Zoltan Aroksallasi (FX and rate strategist at Erste Bank), and I thank them for their insight, their knowledge, and their time. By Marek Drimal, EMEA Strategist, moderator of the workshop.

The Republic of Slovenia is set to sell its longest bond ever on Tuesday, picking banks for a 60 year euro benchmark — a 36 year extension of its curve.

The European Central Bank meeting on January 21 did not strike a pleasing note for investors in eurozone government bonds, and spreads are still wider. But primary market participants seem unconcerned.