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Dollar swap spreads inched down over the course of the week and by the close of trading yesterday (Thursday) they were only 2bp-3bp away from the lows of the year. The five year and 10 year mid-markets were around 79.5bp over Treasuries at the close, about 3bp outside the bottom of the range set in mid-May. Liquidity drained away from the market as the summer season began in earnest. However, a flurry of new issues hit the tape, and the swap business associated with these deals provided the major flows of the week. The combination of low rates, improving secondary market performance and the steep yield curve was too mouth-watering for several corporate treasurers to ignore, despite the season.

Brazil stunned the international markets this week by issuing a ¥200bn two year Samurai, the biggest yen transaction from an emerging markets borrower at a time when the region is still beset by the Argentine crisis. Bookrunner Nomura Securities and joint lead Daiwa SMBC not only went ahead with the issue, but increased it from an original ¥180bn.

Brazil stunned the international markets this week by issuing a ¥200bn two year Samurai, the biggest yen transaction from an emerging markets borrower at a time when the region is still beset by the Argentine crisis. Bookrunner Nomura Securities and joint lead Daiwa SMBC not only went ahead with the issue, but increased it from an original ¥180bn.