France

The French presidential election saga has taken another twist, with far-right candidate Marine Le Pen’s chances slipping — but those of Jean-Luc Mélenchon, from the other extreme of the political spectrum, rising. Asian investors are pulling back from deals until the election hurdle is cleared, say issuers — but the rise of Mélenchon may also provide an earlier than expected relief rally.

Expecting the unexpected has been market philosophy since the Brexit vote last June. Adherents may well have thought that made Marine Le Pen a certainty to win this year’s French presidential election.

Guarantor: Republic of France

The corporate bond market came to a standstill on Wednesday, prompting investors to warn issuers deciding to wait until after the Easter break that they will likely be forced to pay up.

The euro high yield market closed the week before the Easter break in strong form, with bonds from Burger King France and Colfax, the US gas company.

Michel Péretié, the ex-chief executive of Société Générale CIB, has backed the creation of a new SME bank focused on the Benelux region and Germany.

Wobbles in eurozone government bond secondaries this week failed to deter a strong showing from a pair of public sector issuers in primary on Tuesday. Unédic found strong demand and tightened from guidance on its longest dated benchmark ever, while Austria broke a series of records with a 10 year euro benchmark.

Once France broke international records for sovereign defaults, thanks to wars, money printing and dodgy liability management.

Crédit Agricole issued a five year senior non-preferred bond on Tuesday, attracting a robust order book and pricing flat to its curve. The deal showed investors are still “desperate to grab what they can get”, according to one FIG banker, despite increased uncertainty over the rates outlook and the outcome of French elections.

The pace of borrowing has slackened for public sector borrowers as Easter approaches but a few are still out hunting for second quarter funding.

Unédic and Austria have announced that they will sell euro benchmarks at the long end of the curve on Tuesday.

French finance minister Michel Sapin has warned British officials that London will lose its euro denominated derivatives business after leaving the European Union, saying that the bloc must be “masters” on rules that apply to its currency.