Europe

Investor sentiment towards Spain and Italy has improved since August, according to a Crédit Agricole survey. However, most buyers’ credit lines are unchanged, which means many still cannot take advantage of remarkable relative value.

Bayerische Landesbank sold its second ever dollar covered bond benchmark on Tuesday, pricing a $500m two year trade that carried one of the lowest ever coupons in the dollar covered bond market.

SNS Bank’s covered bonds have been downgraded, but remain firmly above the increasingly populated and more relevant double-A minus rating threshold. Moreover, with a collateral score that beats many top German and Norwegian issuers, alongside a recently enhanced programme that has Rabobank as the swap provider — its bonds offer tremendous relative value.

Bayerische Landesbank opened books on its first benchmark dollar covered bond since 2005 on Monday. It could price the $500m two year trade later on Monday but may leave books open overnight to attract Asian accounts.

Core covered bonds are performing poorly, with low coupons putting investors off, according to Deutsche Bank analysts. Higher yielding peripheral paper could benefit as a result, but the prospect for fresh benchmark trades from southern Europe remains uncertain.

The PBOC’s main priority is to keep price rises under control and only after that to look at growth, deputy governor Yi Gang said

The IMF/World Bank annual meetings in Tokyo ended with little agreement on what to do to solve the eurozone crisis – but with a lot of intriguing insights into where the world economy is going

Protectionism – both trade and financial – is on the rise worldwide as a result of the global crisis. The need for new rules of the game is as urgent as ever

Geopolitical risk has once again clouded the outlook for commodity prices – even as macroeconomic fears take their toll

Even smaller middle-income nations are in danger of slipping backward as global economic growth slows

It plans to invest its capital over the next five to seven years and will exit its investment within 10-12 years.

Investors are cash-rich and covered bond spreads look set to remain fairly stable – ideal conditions for covered bond issuance. However, deal flow is set to remain quiet as most issuers are well funded, and those that could do deals are about to enter blackout period.