Euro

The Italian government’s economic growth expectations are likely to take a hit from “unintended tightening” of monetary policy if BTP yields keep rising, investors have warned.

Wednesday will be debut day in the green bond market, with Ireland preparing a 12 year inaugural euro benchmark and Société du Grand Paris (SGP) out with a 10 year that will also be its first bond issue of any kind. Both must contend with a market backdrop rife with Italian politics-driven turbulence, although SGP’s deal has so far had what one lead called “one of the strongest starts I’ve seen for a French issuer”.

German car manufacturer Volkswagen livened up investors’ Tuesday with a new triple-tranche deal.

One of Europe’s major electricity producers, Portugal’s EDP sold its first green bond on Tuesday, aligning its fundraising with the company’s green principles.

Bpifrance has made several appointments to its funding team, including a change of its head of funding.

NRW.Bank and Unédic drew solid results in the latest BondMarker scores, with the French agency just pipping the German issuer with its overall average.

The ripple effect of a 17bp rise in the 10 year US Treasury yield helped new corporate bond deals perform in the secondary market last week, despite other financial markets suffering losses. Those higher yields and an expected slower pace of issuance are expected to keep conditions positive for issuers who approach the market.

Romania was able to cut the spreads on both tranches of its euro benchmark on Thursday.

Caisse des Dépôts et Consignatios has reduced its 2018 funding target by 10%, but may not even return to the market for further issuance this year, according to a senior funding official at the agency.

A spike in US Treasury yields on Thursday had a knock-on effect on bond spreads in Asia, posing an additional challenge for issuers ready to head out the gates next week.

Italian government bonds suffered another up and down week as investors first baulked at government plans for the budget deficit to be 2.4% of GDP in each of the next three years — then snapped up paper amid suggestions that the deficit would fall gradually. In any case, many on the buy-side are wary of any policy announcements that come from the government.

Rating: A1/A