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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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  • Concerns over Sri Lanka's ability to manage its debt continue to mount, with S&P Global Ratings downgrading the country further.
  • The EU Summit on Thursday swiftly produced agreement on the bloc’s multi-annual financial framework, including the €750bn coronavirus recovery fund. Though the news is good, particularly for the European periphery, the move in spreads has been muted.
  • At the end of a strong year, Deutsche Bank told investors that its investment bank had not simply benefitted from a rising tide lifting all boats, but that it would be able to carry on generating much of the extra revenue it created in 2020. It also boasted of working on a number of European sovereign debt deals.
  • Not content with the central bank purchase programmes of seemingly infinite elasticity, some Italian officials have recently floated the possibility of the ECB forgiving the debt it has purchased. This is illegal, and changing the law is not what Europe needs at the moment.
  • SSA
    Hungary and Poland will not veto the EU’s budget, ending the threat to the bloc’s €750bn coronavirus recovery fund, after the parties agreed to a compromise at Thursday’s European Summit.
  • New MENA heads at Citi and Goldman Sachs — Julia Hoggett moves from FCA to LSE — LBBW hires Sim for Asia team