Europe

A leaked letter from the European Parliament, seen by GlobalCapital, shows the Parliament has joined in the debate about the Sustainable Finance Disclosure Regulation, which has been watered down to make life easier for institutional investors. The Parliament is calling for the rules to be strengthened, to help savers know which investments are green and ensure compliance does not become just a “tick box exercise”.

In a move expected to add pressure to the already suffering long dated Treasury market, the Federal Reserve confirmed on Friday that US banks will once more have to include Treasury holdings in their leverage ratios from next month.

A wave of central bank rate hikes across emerging markets over the last week, particularly in CEEMEA, has stimulated investor confidence amid a volatile period in global markets. The recent rise in US Treasury yields had threatened to pull money away from EM, with a further risk of weakening local currencies.

Vaccine optimism and the end of Brexit has meant that the UK has enjoyed its best ever start to a year in the equity capital markets.

The ball is rolling when it comes to banks printing green deals in subordinated formats, but there are still some lingering questions over whether capital makes the best fit for ESG issuance frameworks.

Canadian media conglomerate Thomson Reuters has sold £745m of shares in London Stock Exchange Group (LSEG) to settle tax liabilities arising from the UK exchange operator’s acquisition of Refinitiv, the former Thomson Reuters finance and risk business.

Bond markets have been settling in for a period of higher US Treasury yields since Wednesday when the Federal Reserve confirmed it did not expect to raise rates before 2024. While that made long-dated issuance trickier for SSA issuers, there was hope that emerging market bond issuance will soon resume, even if a bumpy ride lies in wait. Mariam Meskin, Oliver West and Lewis McLellan report.

National Bank of Canada’s €500m seven year covered bond issued on Thursday, showed that a positive spread to mid-swaps has a greater impact on demand than a positive yield.

Mounting concerns over rising rates resulted in a fair degree of price sensitivity for a rare 20 year covered bond issued on Tuesday by Bawag, the Austrian lender. But with a little new issue premium, demand was still good.

Rating: Ba3/BB-/BB

The SSA market on Thursday was digesting the result of the previous night’s Federal Reserve meeting. Fed chair Jerome Powell took a dovish stance in spite of high economic growth, and some market participants believe that the strengthening inflation outlook could hurt demand for bonds at the long end of the curve.

Deutsche Bank and Standard Chartered sold their first green and sustainable bonds in dollars this week, giving US investors a chance pick up supply that would normally be expected to arrive in euros.