Little to no supply is expected in December, according to syndicate bankers, who said that while the primary market has not yet shut up shop and conditions remain supportive, issuers will be better advised to wait until the new year given the apparent lack of any downside risk.

Last week only one deal, a €1bn seven year deal from United Overseas Bank (UOB), was launched, and bankers said this could constitute the last supply of 2020, there being no apparent covered bond pipeline for this week or beyond.

“It’s getting less and less realistic that something will come along,” said one, “so it looks as if we are gradually drawing to a primary market close here.”

The asset class will continue to be characterised by an excess of demand and restrained supply in the new year, he said, giving issuers little incentive to launch a deal before the holidays – although it is still possible an unexpected mandate could arise after a European Central Bank monetary policy meeting next Thursday, he suggested.

“It would likely work, too,” he added, “but I doubt people will make use of this window. Why risk ruining your performance with an odd last minute move so close to Santa Claus?”

Another syndicate banker echoed this and said time is running out for the covered bond market in 2020, but that a €500m trade in an uncontroversial tenor would probably go well.

“It’s already Tuesday afternoon,” he said, “and if you’re not ready to print this week, I would expect you would be better advised to wait until January on the risk that some investors are closing their books.”

The technicals supporting the asset class are unlikely to change, even if the market could become choppier in the new year, he added, although he warned of the dangers of complacency.

“For covereds, we are pretty calm,” he said, “but if everyone takes it for granted that things will be rosy, this is usually when things go belly up.

“However, it’s hard to see what will upend it, even a challenging hard Brexit.”

Another banker said he does not expect a tsunami of supply in January as is typically the case, which, coupled with diminished overall funding needs, further reduces arguments in favour of pre-funding.

“If you were doing a trade today,” he said, “you would be doing so in anticipation of a very busy January with potential volatility risk – but at the moment there is a negligible chance of either of these happening.”