Syndicates’ cupboards are bare and expectations of any benchmark covered bonds hitting the market this week are low, as a busier than expected first half of the year has put a sizeable dent in full year forecasts and issuers have little reason to rush to do deals, bankers said today (Monday).

Total euro benchmark covered bond issuance stands at Eu67.025bn for the first half of the year, according to data from The CBR, which compares with Eu54.68bn for the same period in 2013 and Eu69.895bn in 2012, and means supply is generally well in advance of forecasts for the entire year.

A Eu150m tap for Deutsche Pfandbriefbank (pbb) was the only benchmark covered bond supply last week, which fell from Eu5bn the week before when deals from six issuers made for a surge of activity.

Syndicate officials this morning said the official pipeline is empty and that they are not expecting much supply this week.

“If an issuer wanted to come they could, but if they want to wait it’s not to their disadvantage,” he said. “Issuers are in the driving seat.”

He noted that there was only limited supply in July last year, when year-to-date issuance was at that stage lower than it is this year. Five deals for a total of Eu4.5bn were priced in July 2013, according to The CBR data.

Another syndicate official said that if any deal were to emerge this week it would probably be after today given that it is the end of the month and the first half of the financial year.

“It feels like the summer lull is starting already, and like it may be longer than normal,” said a syndicate official. “The first half of the year has been busy, and volumes are more than where they were expected to be in January.”

Another syndicate official said he did not expect buy-side staffing levels during the summer holidays to be very relevant to supply volumes, with investors having money to put to work and investment criteria typically being sufficiently clear for more junior staff members to act on, with the market being a seller’s one, in any case.

The main development related to the FIG primary market is Goldman Sachs’ roadshow of a new structured secured product, “fixed income global structured collateralised obligations” (FIGSCO). The roadshow ends tomorrow (Tuesday), but a syndicate official said his impression was that a deal will not follow immediately after as investors would need time to assess the structure and, if interested in the product, get approval from credit committees.

Barclays, Crédit Agricole, Natixis and UBS are on the FIGSCO mandate alongside Goldman Sachs.

In the traditional benchmark covered bond market, meanwhile, a couple of issuers are said to be eyeing issuance opportunities, albeit in the loose sense of having conversations about market conditions with lead managers rather than having, in the words of one banker, an “acute” new issue project. Belgium’s KBC Bank is understood to be one such issuer. Toronto-Dominion Bank could return to the market after having on Wednesday had a legislative programme registered with the administrator of Canada’s covered bond legal framework, but syndicate officials were not aware of any formal roadshow having been mandated.

There are a host of reasons for not expecting much benchmark covered bond supply this week or, for that matter, the next few weeks and even months, according to another syndicate official, such as the perennial summer lull, limited asset growth and low funding needs. In relation to the latter he highlighted that although banks have been focussing on the hybrid capital market their issuance there also has “real liquidity effects”, saying that this is contributing to reduced funding pressure.

Borrowing available via targeted longer term refinancing operations (TLTROs) that he European Central Bank has announced is also expected to have an impact on banks’ wholesale funding needs, with syndicate officials having attributed the recent lull in supply in part to “introspection” by issuers about the TLTROs and how they may change their funding plans as a result.