There was no issuance line-up to speak of this (Tuesday) morning, bar speculation about a move from France’s CRH, according to syndicate officials, with anti-austerity election victories in France and Greece having been digested but markets still fragile.

Alexis Tsipras, head of Greece's Coalition of the Radical Left (Syriza)

As expected, Socialist Party candidate François Hollande emerged as the winner in the second round of France’s presidential elections on Sunday, while political observers said Greece may have to go back to the polls in June after New Democracy, the centre right party that received the most votes in Sunday’s elections, failed to form a coalition yesterday (Monday), leaving anti-austerity parties to try to build a coalition.

“The overriding theme is whether there will be any government in Greece,” said a syndicate official, “and sifting through the meanings of the elections in terms of the fiscal and growth pact.”

Hollande will have to deliver on some of his campaign promises, he suggested, raising the question of how they will be paid for.

Other syndicate bankers said that the implications of the weekend elections had largely been digested, with markets having recovered yesterday after a nervous opening, and French bank stocks ending up in the green.

“It underlines that there is no need to panic,” said one.

The situation in Greece and a government rescue of Spanish bank Bankia are the two main events hanging over the markets, said another, noting that the spread of French government bonds over Bunds was relatively stable.

The deal pipeline is empty, according to syndicate officials, save for speculation about whether France’s Caisse de Refinancement de l’Habitat may come to market. One said that it would make sense to speculate about French benchmark supply with the country’s presidential elections out of the way, and that CRH would be the natural candidate to reopen that market.

Today is a public holiday in France. The last French benchmark supply was a Eu1bn five year deal from Axa Bank Europe SCF, although the collateral is Belgian residential mortgage backed securities.

The syndicate official said that the benchmark covered bond market is not shut, and that with liquidity and demand still available an issuer with a straightforward credit would be able to do a “nice” deal this week.

Another said that many issuers do not want to tap the market and that he is not aware of any imminent new issue projects although issuers from high quality jurisdictions could access the market.

Core covered bond spreads tightened somewhat this morning, he said, with cash senior unsecured levels also coming in a bit despite indices widening.

Another syndicate banker said he had “zero expectations of activity” this week given a very “bumpy” market backdrop and choppy calendar.

“It’s not a market backdrop I would suggest is a screaming window,” he said.