Europe

Deutsche Pfandbriefbank tapped a recent floating rate mortgage backed covered bond for €150m on Wednesday, although fresh benchmark deals are unlikely in the wake of Italy’s election, said debt bankers. They fear the surge in volatility could close the issuance window for weeks. However, other bankers countered that strong core names would have no trouble bringing transactions.

Covered bond bankers are still hoping for deals this week, despite uncertainties over the quality of order books in recent deals. Meanwhile, the market is waiting for the Italian election results and watching for any delayed reaction to the UK’s rating downgrade.

The Bank of England and the People's Bank of China are close to signing an agreement on a renminbi/sterling swap arrangement

The real test for emerging markets will come later; currently, the eurozone debt crisis is a bigger risk than the US Fed minutes for these assets

After being absent from the euro covered bond market for nearly two years, Danske Bank made a surprise return on Thursday, mandating leads and opening books for a €1bn seven year deal priced at the tight end of guidance.

Caisse de Refinancement de L’Habitat has sold the first Swiss franc covered bond in almost six months. Its good reputation among Swiss investors and upcoming redemptions helped CRH to price the deal through its Swiss franc curve.

SEB was tempted into a surprise return to the euro covered bond market by the best relative funding levels versus its domestic market for some time, its head of treasury management told The Cover on Tuesday. John-Arne Wang said SEB saw a chance to grab tighter funding on Monday, thanks to a three week drought in the euro primary market.

The international benchmark Brent crude has a ‘strong floor’ at $80 a barrel, as demand from emerging markets will soar, commodity strategists say

A multi OBG deal from Italy’s state owned public financing institution Cassa Depositi e Prestiti now looks unlikely, bankers told The Cover on Friday. CDP is expected to decide by the end of this month whether and how to proceed with plans to funnel long term funding to Italy’s smaller banks, which are currently locked out of the markets. A multi issuer Obbligazioni Bancarie Garantite had been touted in the market this week, but industry officials on Friday said this was the least likely option, given the costs involved.

Asset allocators are overweight equities and underweight bonds and cash, with high overweight positions in emerging markets, a survey shows

Wednesday’s sterling deal from Bayerische Landesbank came as welcome relief to supply starved investors but the paucity of supply has also been particularly marked in the euro market, where issuance volumes are half of last year’s shrunken levels. The technical mismatch is helping to spur demand in the secondary market where Spanish deals are once again in vogue.

Bayerische Landesbank followed Stadshypotek on Wednesday morning by issuing a £200m sterling FRN, which provided it with slightly cheaper funding to euros — a market in which issuance has fallen to half of what it was at this point in 2012.