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Sovereigns

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SSA
All as expected by the market, but lack of more details regarding bill issuance somewhat disappoints
◆ Sovereign back in euros, alternating from dollars in 2025 ◆ “Very low double digit” spread over Germany ◆ Sweden, KfW key comps
Likely successor as UK prime minister Andy Burnham further to the political 'left than anyone else’ but market hopeful that scope for more borrowing is limited
Fiscal targets for 2026 already met, more early debt repayments underway
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  • Italy hit screens on Monday to announce a dual-tranche syndicated deal comprising a new 10 year benchmark and 30 year inflation-linked bond.
  • The UK sold its last syndication of the financial year on Tuesday, selling a £2.25bn 2051 index linked bond — its first syndication in the format since November 2019.
  • The green premium between Germany’s five year green Bobl and its conventional twin has increased to 3bp for the first time since the green Bobl was priced last November.
  • Thomas Piketty and 100 other economists from across Europe put their signatures to an op-ed this week calling for the ECB to cancel its holdings of government debt. GlobalCapital debates whether it is radical but wise policy making, or would make matters worse still.
  • SSA
    Eurozone inflation leapt up in January, steepening curves and fuelling feverish demand for long-end bond issues. But the move lacks the vigour and commitment of the US reflation trade and economists expect it to subside later in the year. As Lewis McLellan reports, with no prospects of higher rates, investors will be pushed into longer and longer debt maturities as they attempt to lock in positive yields.
  • Rating: Baa1/A/A-