Europe

The nomination of IMF managing director Christine Lagarde to be the next governor of the European Central Bank prompted market participants to debate the merits of her potential appointment.

The G20 meeting in Japan ended as well as those in markets could have expected. The US and China may have agreed to delay additional tariffs against the other but none were removed either. Investors are beginning to plan for a more sustained period of hostility between the two countries.

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The EU’s decision not to extend equivalence to Swiss exchanges and Switzerland’s subsequent retaliation is a perfect example of why the measure is an insufficient framework for future EU-UK financial services relations after Brexit.

Two German issuers returned to the corporate euro bond market on Tuesday, amid a thirst for risk among investors sparked by last weekend’s G20 meeting.

Austrian agency Asfinag won a big order book on Tuesday, allowing it to price 3bp tighter than guidance, in a 10 year tenor the issuer hasn't accessed since 2009. Municipality Finance and the German federal state of Lower Saxony will add to the euro SSA supply on Wednesday with a 10 year green bond and a seven year benchmark, respectively.

Lloyds Bank Corporate Markets, the non-ringfenced arm of Lloyds Banking Group, has made its capital markets debut. The UK bank went private to place short-end paper in both fixed and floating rate formats, ahead of a debut in the public market later this week.

Cembra Money Bank, the Swiss financial services company, struck a Sfr277m ($281m) deal to acquire Cashgate on Monday, a Swiss consumer leasing and credit provider, from Aduno Holdings.

The European Banking Authority (EBA) has said that Basel III rules could have a severe impact on capital ratios in the European banking sector, creating a capital shortfall of up to €135bn across the industry.

The City of London Corporation, via its endowment fund The City’s Cash, has held its first roadshow for its inaugural US private placement notes. The funds will be partly used to finance the consolidation of the Billingsgate, Smithfield and Spitalfields wholesale food markets at a new site in Dagenham, Essex.

Canadian Imperial Bank of Commerce (CIBC) has mandated leads for its first euro covered bond since January 2018.

Covered bond spreads are so tight and yield so low, that a correction is probably overdue. But strong technical factors will continue to support the market — at least until September.