Brexit risks increase in Irish funding costs

The Irish bond market faces challenging headwinds over the coming months in the form of domestic political risk and the dangers of a potential Brexit.

Support from the European Central Bank bond purchasing programme will help mitigate the short-term risks as will the strong Irish macro-economic backdrop and positive funding outlook.

The longer it takes to form a stable government, the more risks increase and the dual headwinds of protracted domestic political risk coupled with the upcoming Brexit risks will increase volatility surrounding Irish government bonds creating a challenging environment for investors.