Europe

The US Federal Reserve has been raising rates for nearly three years now and was tapering its quantitative easing for two years before that. Meanwhile the European Central Bank was still cutting its rates and only in 2018 did it start tapering its quantitative easing. However, the change in the ECB’s policy may mean we see growth converging rather than diverging and it is something investors are already considering.

Société Générale followed BPCE into the covered bond market on Tuesday, also taking the opportunity to pre-fund ahead of what many market participants expect to be a busy start to 2019.

The Federal State of Brandenburg was oversubscribed for its second ever euro benchmark in the 20 year part of the curve on Tuesday. The deal offered a 2bp concession, according to the leads.

Boston Scientific, the US medical devices manufacturer, has agreed to buy the UK’s BTG for £3.3bn, with Barclays providing a bridge loan to finance the medical industry transaction and continue the trend of borrowers turning to small banking groups to fund purchases.

Fundamenta Real Estate, the Swiss housing developer, has fixed the terms for its Sfr91.5m re-IPO on the SIX Swiss Exchange, which is expected to value the company at Sfr375m.

EU supervisors should not need Andrea Enria, chair of the European Banking Authority, to tell them that full transparency on Pillar 2 is beneficial for the capital markets. It should have been clear all along.

The Bank of England has said that it will publish the results of its hotly anticipated stress test of major UK banks next week, rather than in December as originally planned. The performance of the country's lenders has been in focus amid uncertainty around Brexit.

HSBC Canada opened books on Tuesday for its first covered bond and followed in the same three year maturity, and with the same starting spread, as DBS Bank's issue on Monday. But, after several hours, when the spread was fixed at the initial level, lead managers failed to update investors on the order book size, leading some to question how well the deal was going.

Sister issuers the European Stability Mechanism and the European Financial Stability Facility will raise a combined volume that is €13.5bn less next year than their 2018 target.

Belarus is working to issue its first sovereign Panda bond, GlobalRMB understands.

The vague equivalence arrangement laid out as a possible future relationship between the UK and EU on financial services is unsuitable for two jurisdictions with such interconnected markets, and it is in the best interests of both UK and European firms to push for a closer relationship.

A pair of socially responsible investment deals from public sector borrowers received mixed views on Monday from on-looking SSA bankers. Instituto de Crédito Oficial was able to tighten its spread by 3bp for its first syndication of 2018, while Bank Nederlandse Gemeenten returned for its second sustainability bond of the year.