Portugal

Covered bonds issued this week from banks in Italy and Portugal were a roaring success from the sellers’ point of view. But none could have been done without the European Central Bank’s help.

Portugal’s secondary spread over its peers rose on Wednesday amid concerns that progress on its economic reforms could be slowed by a political stalemate — but it was still able to cut borrowing costs at a bill auction.

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.

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.

Novo Banco and Bank of Cyprus have both restructured their existing hard bullet covered bond programmes into conditional pass through programmes.

China held a series of high level government meetings with the UK and France in September. One of the most publicised pieces of news was the London’s plan for a Stock Connect but perhaps just as important are a number of moves by Euronext to facilitate Chinese investment on its platforms and develop new RMB products.

A eurozone periphery sovereign is set to meet investors before a possible euro syndication, as a pair of countries from the region unveiled their funding plans for the rest of the year.

Italy shunted just over €2bn of redemptions due over the next three years into the next decade, as Portugal sliced several basis points from its short term borrowing costs.

Spain kicked off a busy week for the eurozone periphery with a bill sale where the sovereign’s borrowing costs repeated their pattern for much of this year by bumping around 0%.