Overall, European credit indices have been trading range-bound over the past week, with the European main and crossover indices being broadly unchanged compared with last week. In government bond markets, Greek bonds outperformed, with the country's 10-year bond yield dropping by more than 50bp, on optimism about a potential forthcoming agreement for a new rescue package for the country after a meeting with eurozone finance ministers last Monday.
Last week was otherwise extremely busy in terms of new issuance activity in the euro corporate bond market. Total euro issuance came in well above EUR30bn, with some EUR20bn stemming from the corporate segment, which is the second highest volume in one single week so far this year. Among last week's issuers were Suez, Johnson & Johnson (NYSE:JNJ), Total, General Motors (NYSE:GM) and Kraft Heinz.
Last Friday, the ECB presented more details regarding its forthcoming corporate bond buying programme. According to the ECB, the purchases will be done by six national central banks with coordination from the ECB. Also, it was made clear that car companies will be part of the purchase programme, even though many of them have their own in-house banks and as banks are excluded from the programme. Also, while the ECB can acquire up to 70% of a single bond, it said it will be mindful of the potential impact of its purchases on market liquidity.
To read the entire report Please click on the pdf File Below