(Bloomberg) — An upcoming surge in euro-area bond sales should be more than swept up by the record amount cash of sitting idly in the economy, potentially adding fuel to the rally sweeping across the region’s debt markets.

Next week, bond offerings in the eurozone are expected to rise five-fold, with Germany, Italy and France, among others issuing a combined 30 billion euros ($35.4 billion) worth of securities, according to Commerzbank AG. That’s still less than the amount of debt coming due.

The supply also comes as excess liquidity in the euro area ballooned past the 3-trillion-euro mark for the first time ever last week, thanks to unprecedented support from the European Central Bank.



chart: Italy sells debt next week with yields at record lows


© Bloomberg
Italy sells debt next week with yields at record lows

The monetary authority’s liquidity injections have already pushed yields on some of the region’s riskiest borrowers to record lows. With speculation now growing that the ECB will expand and extend its program in December, demand for euro-area debt could prove solid at the auctions, spurring the next leg of the rally.

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“The period from now until year-end does provide a fertile backdrop for further spread compression,” UBS Group AG strategists including Rohan Khanna wrote in a note to clients, referring to the yield premium between peripheral debt and German bunds.

While U.S. election uncertainty could lead to some volatility, “the ECB has enough firepower to fight against any unwarranted widening in spreads,” Khanna said.

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Offering additional support will be around 41 billion euros of redemptions from Germany, Italy and Ireland, which will need to be reinvested. Meanwhile, coupon payments from these three nations and Portugal will total over 1 billion euros next week.

Budgets, Brexit

National finances will also

Goldman Sachs


  • Goldman Sachs’ chief Asia economist Andrew Tilton told CNBC’s “Street Signs Asia” he is “reasonably upbeat” on the economic recovery going into 2021. 
  • He said: “We think Asia’s really the best positioned of the major regions right now, just given the good control of the virus in most of the regions outside of India and some parts of Southeast Asia.”
  • He said purchasing managers indices were better in September, suggesting momentum in the industrial sector remained strong. 
  • He said a fiscal deal in the US between Republicans Democrats would bolster growth in Asia.
  • A blue wave scenario where a Democratic president takes control of both the House and Senate would bolster growth but may also “pull forward” the timing of the next Fed rate hike,” he said. 
  • Visit Business Insider’s homepage for more stories.

Asia is far better “positioned” to stage an economic recovery from the pandemic, Goldman Sachs’ chief Asia economist Andrew Tilton told CNBC’s “Street Signs Asia” Monday. 

Tilton said he is seeing “reasonable global momentum” going in the fourth quarter. 

“We think Asia’s really the best positioned of the major regions right now, just given the good control of the virus in most of the regions outside of India and some parts of Southeast Asia,” Tilton said. 

“We just had a round of purchasing managers indices which were almost all better month-on-month, suggesting that industrial sector momentum remains pretty good,” he added. 

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China’s huge manufacturing sector continued to recover in September, affirming the world’s second largest economy is recovering from the pandemic. 

Tilton

Facing enormous financial strain because of the shutdown of the theater industry, the health insurance fund that covers thousands of stage actors is making it more difficult for them to qualify for coverage.

Currently, professional actors and stage managers have to work 11 weeks to qualify for six months of coverage. But starting Jan. 1, they will have to work 16 weeks to qualify for a similar level of coverage.

Nonprofit and commercial theater producers contribute to the health fund when they employ unionized actors and stage managers, but because theaters have been closed since March, those contributions — which make up 88 percent of the fund’s revenue — have largely ceased.

“The fact that we have no contributed income is something no one could have foreseen,” said Christopher Brockmeyer, a Broadway League executive who co-chairs the fund’s board of trustees, which is evenly divided between representatives of the Actors’ Equity union and producers. “We really put together the only viable option to cover as many people as possible with meaningful benefits under these totally unprecedented circumstances.”

Brockmeyer and his co-chair, Madeleine Fallon, said the fund, which currently provides insurance coverage for about 6,700 Equity members, is facing its biggest financial challenge since the height of the AIDS crisis. At that time, the challenge was high expenses for the fund; this time, it is low revenues.

“Everybody is out of work, everybody is panicked, everybody has lost income and can’t make their art, and on top of that their health fund is in crisis,” said Fallon, who leads the union bloc on the board. “It’s been an emotionally difficult journey, but we hope our members will understand that we did find the plan that gives us our best chance to rebuild.”

Under the new system, those who work at least