Europe

Euro corporate bonds budged little on Wednesday morning as market participants reacted to Donald Trump’s surprise US election victory, with some investors buying on the dip and expectations growing for further central bank intervention in the market.

The FIG market looked set to shrug off Donald Trump’s surprise victory in the US presidential election on Wednesday, and bankers were optimistic that new issuance could restart in a matter of days.

Covered bond spreads held firm as Donald Trump unexpectedly won Tuesday night's US presidential election. But, with many participants anticipating much greater US fiscal stimulus, rates markets could yet be roiled.

Banks will have more time to build up sufficient equity and debt for their minimum requirement for own funds and eligible liabilities (MREL), said the Bank of England.

The European Central Bank’s politicised decision to allow bail-inable German senior unsecured debt to be eligible for repo, whilst denying the same rights for everyone else, is untenable.

Investor support for Turkey has proved remarkably resilient this year. A coup attempt and ensuing state of emergency, and two downgrades to junk, did little to shake support, but Turkey’s luck is running out as the attention turns to deteriorating economic indicators from the region.

Singapore Exchange has completed its takeover of the Baltic Exchange in London.

Shares in Tobii, the Swedish eye-tracking technology company that floated in April 2015, rose 5% on Monday after it announced plans to raise Skr450m (€45m) in a rights issue, saying the consumer business opportunities open to it had grown faster than it expected.

Shares in Meyer Burger Technology, the Swiss solar panel maker, plunged 13% on Tuesday after it announced a recapitalisation programme involving a rights issue, an adjustment of the terms of the Sfr100m convertible bond it issued in September 2014, and the extension of a loan secured on one of its properties.

Nordea and SEB have underwritten €760m of loans for the merger of Finnish paper and pulp makers Ahlstrom and Munksjö.

Market participants are confident that the strong technical support of the European Central Bank will protect euro corporate bonds from US election induced volatility, but central bank intervention does not seem as powerful a tool as it once was.

Do not be reassured by the checks and balances narrative. The US presidential election matters desperately. Either the US will be in a position to keep leading the world, or it won’t.