Spain

Spain’s nine month borrowing costs dropped to a euro-era low of minus 0.6bp at an auction on Tuesday, amid signs of investor pushback against negative yields.

Greece’s yields screamed lower on Monday despite reports that the country’s creditors are unhappy with its government’s reform efforts. Meanwhile, Cyprus could bring a bond after completing a roadshow last week.

Uncertainty over the make-up of the Portuguese government following an inconclusive election is playing havoc with the sovereign’s yields — but analysts warned it is not alone in suffering from potential political risk.

Bank of Ireland and Caja Rural Unidas issued this week’s only two covered bonds from Europe’s periphery, both offering attractive concessions.

Spain took itself over the 90% mark of its reduced 2015 funding programme with an auction where yields fell across the maturity curve.

Caja Rurales Unidas issued a €750m five year deal on Thursday, building a slightly oversubscribed book in a short time frame by offering a relatively attractive new issue premium.

Santander and BBVA both looked to the dollar market to secure senior funding on Tuesday amid a bare session for European FIG issuance.

Portugal is underperforming its nearest peers in the eurozone periphery ahead of a debt auction later this week, amid tense talks to form a government for the country.

Italy has sparked a busy week for the eurozone periphery by cutting its borrowing costs at an auction of short term debt.

Following the announcement of a rating upgrade of the Kingdom of Spain by Standard & Poor’s on Friday, several Cédulas programmes are likely to be upgraded. But since no regulatory rating thresholds is likely to be broken, spreads should be unaffected, said Commerzbank analysts on Monday.

Santander fell victim to market spasms this week, pulling a dollar trade amid extreme volatility.

Swedish Covered Bond Corp (SCBC) and Bankinter issued €750m covered bonds this week, but after record issuance, their limp receptions may cause others to postpone funding plans.