Though few European investment grade issuers came to market this week, there was a standout deal from Schneider Electric on Monday (26 October). Its €6bn jumbo deal was the largest by a European corporate so far this year.
Even so, overall volumes were muted despite the supportive rates backdrop. The German 10-year Bund yields edged down by almost 4bps over the week, as equivalent UK and Spanish yields fell by 7.5bps and 5.4bps, respectively. French OAT 10-year yields were up just 2.5bps over the period.
That calm held when the European Central Bank left rates unchanged at 2.50% on Thursday (29 October). In a statement the ECB said that while it is “not pre-commited to a particular rate path” higher energy prices pose “upside risks to the inflation outlook”.
Markets are pricing in another rate hike before the end of the year. However, it was Christine Lagarde who grabbed the headlines, announcing plans to step down as ECB president on 7 February
“We don’t think Lagarde’s departure will have a meaningful effect on the policy trajectory,” Mike Bell, Head of Market Strategy at RBC BlueBay said in an email after the announcement.
Sticking with central bank news, the Federal Reserve...
