A syndicate official said that the market appeared stable this morning following a positive opening in response to comments from European politicians about initiatives to boost economic growth. He said that this lifted sentiment, although the market had since then drifted sideways.

Mariano Rajoy, Spanish prime minister

A downgrade of 16 Spanish banks by Standard & Poor’s this morning did not affect spreads, he said, with the rating action likely to have already been priced in. The sovereign was cut to BBB+ on Thursday.

Syndicate officials variously highlighted a public holiday in parts of Europe tomorrow (Tuesday), a Spanish auction and a European Central Bank meeting on Thursday, and the release of non-farm payrolls in the US on Friday as events that will restrict market activity this week.

“Most people are looking at Wednesday,” said one. “It will be a quiet week with activity spiking on Wednesday.”

Austria’s HYPO NOE Gruppe Bank is said to be a possible new issue candidate, reportedly having already awarded a mandate for what is understood to be a seven year deal.

Erste Group Bank and UniCredit Bank Austria are the only two Austrian benchmark issuers to have tapped the market so far this year, in contrast to five deals from the country last year.

A syndicate official said that issuance opportunities are available for core issuers, but that the window “is not open very far”, with Wednesday to possibly Thursday morning the timeframe in which supply is likely to be able to be brought.

He suggested market conditions this morning were better described as stable rather than positive, with the Bund Future up 32 ticks at one point, for example.

However, he said that deals such as that for Nordea Bank Finland last week showed that “strong issuers” always find a way even when the Bund Future is around all time highs. The Finnish issuer on Wednesday sold a Eu1.5bn seven year deal that was in high demand.