In the early hours of this Monday, the fixed income market reacted very aggressively, mainly in the shorter maturities of the sovereign curves. In the main bonds with a maturity of 2 years, such as the German or the American, the day was equaling, in debt purchases, the days of greatest tension that were observed in the strongest crises of the last decades and in dates indicated as 2008, 2001 or 1987.

These titles, such as the American and German biennium, even reduced its profitability to in more than 50 pointswhich meant reaching 3.99% in the American title, and the 2.49% in German.

In other words, the sovereign debt has not registered so much buying pressure in 36 years in the case of short-term American bonds -with what became known as Black Monday in 1987- while in the case of the German debt it meant registering a historic leap never seen before in a single day. And in both cases it meant reaching a difference of 100 basis points in the last three sessions.

But the volatility of the fixed income market was not limited to the lower end of the curve. Ten-year bonds, the benchmark for the market, also pointed to a reduction in yields which in the case of the US meant an increase to 3.5% (2.2% of the German bund) at the close of the European markets. However, the flight investors for this type of assets in search of refuge moderated as soon as the session on Wall Street began while an emergency meeting of the Federal Reserve of the United States was taking place to define its strategy after the crisis with Silicon Valley Bank. In this way, the investors initially valued the collapse of the SVB as a warning to the central banks that the rises in interest rates have consequences and that institutions such as the Fed should revise their route sheet to avoid a financial crisis that could harm the economy.

As data, bond yields are back to their February starting point. Dates from which the market began to assess an acceleration in the rise in interest rates to 2023 in the face of worrying macroeconomic data showing more persistent inflation than expected – which led to a tougher tone from central banks.

This correction of short-term debt yields even reversed the inversion of the curve that prevailed in the market before the interest rate expectations greater in the short term than beyond five years. This can be seen in the case of UK sovereign bonds, but also in Italy.

The Spanish title marks again 3.3%

The risk required by the market for Spanish debt briefly exceeded 3.8% in early March, falling 50 points since then to 3.37, which closed on Monday. In this way, investors also turn to the European peripheral debt with expectations of a less harmful monetary policy for the economy than was discounted just a week ago. And as the return on the ten-year German bond fell more than the Spanish one, the risk premium rose to 110 points.

Although the origin is an American bank, the turbulence that the markets are experiencing in the last few days dotted the emissions fixed-income markets in Europe, where the launch of new bonds in the syndicated issue market has been completely paralyzed.

According to data compiled by Bloomberg, it is the first Monday of the year in which there were no issues of this type in the primary market in the Old Continentin a year in which, on average, placements on Mondays registered an average value of 11,000 million euros.

You have to bear in mind that Bloomberg collects the data of large emissions, since the agency has in account to collect its data the emissions syndicated in euros, pounds or dollars, in Europe, with a minimum maturity of 1.5 years, is minimum issuance of 100 million of euros.

After this Monday with no movements in new issues, the March total remains at 63,430 million euros, with an annual total of 542,600 million euros, according to the data processed by the agency. This represents a volume of new emissions almost 40% higher than that produced last year in the same period.

This deceleration in debt issuance also occurred in the United States, mainly in those companies that do not have investment grade and planned to go to the market this monday. According to the agency, eight companies canceled their operations on Monday for fear of the impact that the collapse of the SVB will have. Last Friday there were also no matches of this type, compared to 15 on Monday, March 6.