US election 2016

More dollar deals are expected next week following a searing few days for trades in the currency, but despite bumper books and deal sizes, some in the market feel there is still some price discovery work to do. Meanwhile, US president-elect Donald Trump made his presence felt on the issuance calendar.

The Brexit vote and the election of Donald Trump laid bare the poor predictive power of the massed ranks of financial analysts and traders. But when these political cataclysms hit the screens, nothing broke. Everyone from the IMF down to the lowest financial scribbler has warned that markets are less resilient thanks to regulation — but in the turmoil following these votes, prices moved but institutions stayed solid. Owen Sanderson reports.

European and UK issuers have driven the US Private Placement (US PP) market to near record highs, despite concerns around the Brexit vote and US presidential elections. Now, the prospect of the end of an era of record low rates could push volumes to unprecedented levels, writes Elly Whittaker.

Appetite for 30 year callable zeroes in dollars has been bolstered by Donald Trump’s victory in the US elections and the resultant rise in bond yields around the world.

The euro market for public sector borrowers repoened on Tuesday as a pair of issuers took advantage of calmer conditions since the US election on November 8 to raise nearly €2bn in total — both paying small new issue premiums.

KfW was able to increase from its original size target and tighten pricing on Tuesday with the first public sector dollar bond of over $1bn since the election of Donald Trump as US president.

The opening of China's interbank bond market (CIBM) this year means that the world's third largest fixed income market will become an increasing focus for global investors, according to the world's largest asset manager.

In the past few months, the European Central Bank's policy of buying almost everything in sight has pushed investors to the very frontiers of the maturity spectrum in a desperate hunt for yield. But the game might be up.

We noted last month that realised volatility in the European investment grade CDS market, as measured by the Markit VolX index, was at its lowest for two years. By the end of October, volatility had dipped to 18%, which was the lowest level since the heady days of June 2007. A number of future events were mooted that had the potential to trigger market uncertainty, including next month’s Italian referendum.

A big rift in US volatility trading has opened in the week since Donald Trump’s shock presidential election win, with equity markets quickly calming after the result while the US Treasury yield curve sharply steepened.

Donald Trump, US president-elect, is espousing a position long held by ECB president Mario Draghi: monetary policy is not the whole solution. It’s time to start building.

Rather than wailing about a regulatory Trumpocalypse, those who care about the health of financial markets should seize upon last week’s shock US presidential result to help bring about meaningful and beneficial changes.