Europe

Telefonica’s reopening of the corporate hybrid market is further evidence that large issuers with proven track records and strong financials will call their bonds even if it looks uneconomic to do so, says Johnathan Owen.

With the UK pension fund liquidity crisis sparking heavy selling in ABS, Pauline Quirin looks at how the market absorbed all the supply, and which investors have stepped in sensing a buying opportunity.

Credit metrics will continue to deteriorate in the next year or two, but European high yield bonds in particular are pricing in too severe a downturn, says Mark Holman

With well over €10bn of new bonds sold by European banks and corporates on Monday, Felipe Villarroel analyses the pricing and looks at the patterns that usually emerge when primary markets reopen.

With European energy prices well off their peaks, Felipe Villarroel breaks down the myriad factors impacting the region’s economic prospects in the next few months.

With a surprising statement issued by the Australian regulator, Eoin Walsh looks at the wider implications for the calling of AT1 bonds

With call risk in Additional Tier 1 (AT1) bonds back in the headlines, Felipe Villarroel explains how banks think about the economics of calling, and why he believes market participants frequently overestimate this risk.

With central banks speeding through their hiking cycles, a return to rates stability (elusive thus far) could allow investors to reap the rewards of bond yields that are unusually high for this point in the cycle.

Demand for floating rate assets has driven a strong reopening of the European ABS primary market, and is drawing new investors to the asset class, says Kevin Law.

European governments are unveiling hefty support packages to ease the pain of Russia’s gas shutdown, with implications for inflation and the chance of recession, says Dillon Lancaster.

While economic uncertainty in Europe is building, the healthy cash balances and low refinancing needs of Europe’s high yield bond issuers make a spike in defaults unlikely, says George Curtis.

With Europe facing an energy crisis and the UK bracing for a five-quarter recession, a strong allocation bias to the US seems a no-brainer. However, George Curtis says that when looking at relative value in fixed income, the decision is never that simple.