MünchenerHyp is expected to launch a Eu500m eight year mortgage Pfandbrief tomorrow (Tuesday), but issuance is otherwise expected to remain subdued this week amid a busy economic and holiday calendar, even if market participants see June supply picking up sharply from May.

Münchener Hypothekenbank announced its mandate today (Monday), naming DZ Bank, LBBW, UBS and UniCredit as leads.

MünchenerHyp’s last benchmark was a Eu750m 10 year Pfandbrief on 9 March that was the tightest ever 10 year benchmark covered bond, at 14bp through mid-swaps. Among German supply last week, DG Hyp priced a Eu500m nine year at 15bp through mid-swaps on Thursday and Sparkasse KölnBonn a Eu500m seven year at 16bp through.

Market participants expect primary market activity this week to be otherwise subdued.

“There are a lot of reasons not to do a deal this week,” said a syndicate official, noting that there were no new issues in the senior market, either.

Bankers said the outcome of a Eu750m five year issue from Banco Sabadell on Friday could dissuade fellow peripheral names to from tapping the market, after the deal printed in line with guidance of 12bp over mid-swaps on the back of weak demand that also saw a possible 10 year tranche dropped.

Market participants and analysts cited an ECB meeting on Wednesday and US nonfarm payrolls on Friday, as well as any uncertainty that may arise from a Friday deadline on a Greek repayment to the IMF, as factors that could persuade issuers to hold off issuing.

Furthermore, the window for issuance is expected to be slim this week because of public holidays, with Italy celebrating Republic Day tomorrow (Tuesday) and some areas of Europe, including some regions in Germany, marking Corpus Christi on Thursday.

“It will be an eventful week,” said Joost Beaumont, senior fixed income strategist at ABN Amro. “As such, June could start at a soft note, but we expect issuance to pick up significantly during the remainder of the month.”

Euro benchmark covered bond supply totalled just Eu2.4bn in May, comprising a Sparkasse KölnBonn Eu500m seven year issue, a DG Hyp Eu500m nine year, Banco Sabadell’s Eu750m five year, a Eu500m tap of a four year NordLB issue, and a Eu150m tap of a 20 year Caffil trade.

Analysts noted this made last month the quietest May in terms of euro benchmark supply in at least a decade. The previous low had been in May 2010, when Eu2.75bn was issued.

However, analysts said they expected benchmark issuance to increase significantly this month, with technical conditions to be boosted by an increased level of redemptions. According to analysts at UniCredit, June has the second highest level of redemptions of any month going forward, with 20 bonds maturing for a total of Eu25.7bn.

Jan King, senior covered bond strategist at RBS, said that increased redemptions in June should be conducive for issuance.

“All that liquidity needs to be invested,” he said. “That should provide a good backdrop for new deals.”

“It all comes down to market conditions,” he added. “If factors like Greece lead to rates volatility then we might not see a busier market in terms of issuance in June. Technical factors provide a positive backdrop, but those macro factors could slow the market.”

Maureen Schuller, head of covered bond strategy at ING, noted that the majority of maturities this month will come from French and German issuers, and added that new supply would be most likely to come from these jurisdictions.