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Italian luxury goods group Bulgari this week awarded Deutsche Bank the mandate for an Eu100m three year bond, the company's debut in the international capital markets. Retail demand in Italy and elsewhere in Europe should drive the deal, which will be roadshowed next week in Italy and possibly the UK. Indicative price levels should be known after that, although many analysts expect the paper to be priced off the existing debt of Italian luxury goods peers, such as Prada.

Corporacion Andina de Fomento, the Caracas based supranational, brought some life back into a stagnant Latin euro market this week with a blowout Eu200m five year transaction. Led by Deutsche Bank and Lehman Brothers, the deal was oversubscribed by about 10% and was priced at just 5bp over CAF's outstanding 2004 euro for a one and a half year longer maturity.

Slightly calmer equity markets this week enabled corporate spreads to improve, but new issuance was light, as many European markets were closed on Wednesday for All Souls. In dollars, activity was subdued ahead of next Tuesday's US presidential election. Improvements in the agency sector were reflected in the successful execution of Fannie Mae's new 10 and 30 year Benchmark Securities. The $5bn 6.625% 2010s were priced to yield 91bp over and the $2bn 6.625% 2030s at 95.5bp over. At launch, these levels were 1bp inside Fannie Mae's outstanding Benchmark Securities in the two maturities.

Market report Compiled by Frank Hracs, TD Securities, Toronto

Argentina and its top corporates suffered another setback this week when Standard & Poor's (S&P) placed the country on CreditWatch for a downgrade, just a month after affirming the sovereign's BB foreign currency rating. Although Argentine sovereign spreads started to stabilise this week - the market having already discounted bad news into the country's bonds - bankers warned that a loss of Argentina's BBB- local currency rating could trigger a run of downgrades on the country's blue chip corporates that carry BBB- ratings - something the market has not yet factored into current prices.

The governor of the Czech National Bank (CNB), Josef Tosovsky, has announced that he will retire at the end of the month, after 10 years at the helm, and will join the Financial Stability Unit (FSU) of the Bank for International Settlements as its new chairman. The move, announced on Tuesday, follows the failure of Tosovsky's bid to replace Hungarian ex-prime minister Miklos Nemeth as a vice president at the EBRD. Last week, the Polish central bank was thrown into turmoil with the surprise appointment of its governor, Hanna Gronkiewicz-Waltz, to the EBRD vice presidency coveted by Tosovsky. Now the Czech Republic too finds itself without a head of monetary policy, though at a less economically sensitive time.

Deutsche Post is offering its shares at a large discount to its closest comparable to try and attract interest in its Eu5.8bn-Eu7.4bn IPO and the tactic seems to be paying off. The deal, which offers shares at between Eu18 and Eu23, is thought to be on course to be over four times covered.

US dollar swap spreads gradually tightened again this week in markets characterised by improving credit conditions, but also a dearth of new issue business. The 10 year was trading at around 109bp over Treasuries midday yesterday (Thursday).

Hungary The market is waiting to see who will arrange the new financing for oil and gas company Mol. Bidding for the EIB guaranteed facility closed on Tuesday.

Uncertainty about the Dutch government's proposed changes to the tax treatment of securitisations played havoc in the market this week. The two most recently issued deals, SNS Bank's Hermes II and DBV Levensverzekeringsmaatschappij's Holland Homes closed on schedule, but SNS Bank had to abandon its planned sale of a subordinated tranche, fearing that the tax changes could leave the deal with a cash shortfall.