Market participants this (Friday) morning speculated that a strong, core issuer could tap the market towards the middle of next week, but were tentative in their forecasts in light of volatile market conditions and sharp falls in stock markets.

“Yesterday was a day of collapse,” said a syndicate official, “and today is a continuation of yesterday. It’s not getting any better.”

Poor US data released yesterday (Thursday) contributed to the Dow Jones Industrial Average falling 3.38% and European markets continued the downward trend today, with gold again hitting a new record high.

A syndicate official said that such market conditions continued to make it difficult for an issuer to come with a benchmark.

“It’s definitely not in good shape for a new transaction,” he said – although he was more hopeful for next week.

“A lot of investors’ vacations will be more or less over then,” he said. “And the pipeline is full, with everyone having mandates from issuers waiting to issue benchmarks.

“If the market is not as shaky as it is now next week then we could see a really strong issuer come to the market mid-week.”

Another syndicate official agreed that if a deal came it would have to be Tuesday, Wednesday, or perhaps Thursday, but said that it would all depended on market volatility.

Covered bond bankers’ guesses as to who that issuer could be varied, but all agreed it would have to be a core issuer.

“An issuer out of Sweden or Norway could potentially open the market because they haven’t been a part of the euro-zone crisis,” said one.

“There could also be something next week out of Germany – though I know of nothing concrete,” he added.

Another banker said a German issuer could easily get a deal done next week, but no-one else.

“We can all have our wishes, but looking at it now I’m wondering what’s going to change this market for the better,” he said. “We need some good data or some new information that’s positive.”

Another syndicate official suggested that the market could see a dollar deal next week, instead.