Euro

It’s been a turbulent summer in emerging markets, but borrowers in the Middle East in particular are already eyeing their return to the market.

European corporate bond market participants are enviously looking at their counterparts in the financial and SSA sectors as supply started to flow again in those areas this week. There is no sign yet of any corporate bond issuers returning from the summer hiatus, but investors have clear ideas about what they want.

KommuneKredit hit the screens on Tuesday for a new five year euro benchmark, hoping to emulate the success of the European Stability Mechanism’s deal in the same currency and maturity in July.

The Federal State of Berlin’s new 20 year bond on Tuesday was almost three times oversubscribed, as investors took advantage of the hefty pick up over Bunds.

Greece is expected to return to the bond market before the end of the year, after it exited its third bailout programme on Monday, August 20. But the sovereign needs the ‘perfect’ window amid emerging and peripheral market volatility, said bankers.

Bankers in the investment grade corporate bond market are already looking towards the last week of August for the next corporate bond deal after the market failed to deliver a single new issue last week. But that was no surprise for market participants.

Concerns over the upcoming budget from Italy’s populist government — as well as the months’ long economic crisis in Turkey — took its toll on government bond yields in the eurozone periphery this week. But a hunt for safe assets among investors did play into the hands of top tier credits.

World Bank is looking to issue more deals in euros in its fiscal year, ahead of large redemptions in the currency.

The collapse in the Turkish lira has stoked fears as to how the nation’s borrowers will repay their foreign currency debt just as the country's foreign exchange reserves are shrinking.

Gazprom may have stepped away from the international capital markets but its liquidity position remains strong enough to keep it afloat for the foreseeable future, provided the diplomatic situation between Russia and the US does not worsen.

KfW received solid demand for its €1bn global June 2020 benchmark tap on Tuesday, as investors lapped up the rising swap spreads caused by political tensions in Italy and economic crisis Turkey, and looked for safe assets.

Bank Nederlandse Gemeenten has increased its total funding requirement for the year as it prepares for the second half of 2018.