Week of 23/07/2018

Primary market: The euro activity slowed down last week, with a total issuance volume of €1. 95 bn vs € 5 bn previously . I ssuers preferred to tap their existing bonds rather than issuing new bond references . The EIB was under the spotlight last week with two taps on its Ecoop bonds in the middle part of the curve . The issuer increased the total volume of its 03/2022 bond to €4bn at ms-28 bp, and its 03/2024 zero coupon bond to €3bn at ms-24 bp. BNG came back to the primary market and also tapped two bonds on the long part of the curve : i) its 01/2028 bond at ms-7bp by a further €750m; ii) its 03/2038 bond by a further €150m, the reoffer yield reached 1.401%. Otherwise, CoE increased its 08/2021 bond by €350m at ms-26bp, the absolute yield was negative and reached -0.2%. In the pipeline, ESM should launch a new benchmark this week. For the record, ESM has a funding programme of €8bn for Q3 2018. Secondary market: The SSA market was characterized by investors ’ buying interests on the (very) long part of the cure (10Y and more). This was reflected by the tightening of EFSF’s spreads by 2 to 3bp vs swap on the long maturities in a week time . APP: During the third week of July, t he ECB’s net purchases within the APP have accelerated from €4.8 bn to €11.2bn . The hike was driven by the PSPP , for which the net purchases were multiplied by 3 from € 3bn to €9 bn . Its share out of the APP represented 80.3 % (vs 62.6 % previously). It is worth mentioning that the ECB was also more active last week on the covered bond market as the net purchases within the CBPP3 increased from €192m to €647m . As result, €11.2bn of net purchases remains to be bought by the ECB to reach its monthly target of €30bn. Thus, the ECB achieved c.63% of its target as at July 13 th .