The main index event this month will be next week’s introduction of SGB1056, the new 20Y bond, as the ordinary rebalancing that occurs at close on Friday 9 March will comprise only minor index changes (see table below).
The exact launch date for SGB1056 has not yet been made public but it is due to take place next week. Bond indices will be adjusted after closing on the same day. Assuming that SEK20bn is issued (the upper range of what the SNDO plans to issue) against 50% SGB1047 and 50% SGB1054, this would translate into an extension of 0.28Y in OMRXBOND. This is a large extension.
Naturally, all other indices that contain government bonds will be affected as well.
So far the best performing bond class this year has been covered bonds. We would expect this trend to continue as falling Euribor fixings have put Stibor fixings on a downward trajectory. Cheaper funding rates should translate into more covered bond performance.