Comeback on the cards for short-dated SSA euros

摘要

After shunning the short end of the euro market in recent years, public sector issuers could finally be tempted back, lured by an improvement in funding costs and investor cravings for an alternative to expensive short German government paper. Divergence between monetary policy in the US, where the Fed began to taper in December 2013, and in Europe, where the ECB started asset purchases in March 2015, has contributed to a widening of the cross-currency basis swap.