Brexit, the Donald Trump presidency and a rise in isolated terrorist attacks were some of the shocks that investors faced in 2016, writes Ryan McGrath.

Markets took a lost referendum and the resignation of Italian prime minister Matteo Renzi on the chin, but Irish taxpayers and Government advisers here will be peering into the distance to see what European elections next year will hold for the sale of AIB, as shares in Italian banks fell sharply.

Irish bond markets, along with other debt markets in Europe, traded wildly yesterday, while CRH rose again on stock markets as investors tried to second-guess the effects of the unexpected election of Donald Trump will have on Europe’s politics and companies.

Global shares slumped and gold climbed yesterday as investors crowded into haven assets after the latest US presidential polls suggested a tighter race.

Sterling will slump to 90 pence against the euro in the coming months in the wake of the Brexit vote, putting pressure on Irish firms exporting to Britain, leading analysts have predicted.

Italy’s bond markets were rocked by the Brexit vote amid reports Rome is considering injecting capital into some lenders battered by a fresh selloff.

Irish bonds outperformed its eurozone peers in the first trading day after Moody’s Investors Service upgraded Ireland’s debt pile and delivered a better-than-expected scorecard on the country’s economic outlook.

Moody’s Investors Service has become the first authoritative international voice to play down the potential shock to the Irish economy were the UK to vote next month to leave the EU.

Irish exporters eyeing the British market got some relief yesterday as sterling halted its slide against the euro for the first time in three days.

The implied cost of borrowing on bond markets for Ireland yesterday fell to its lowest level since April as international traders — as had been expected — ignored the uncertain outcome of the Dáil election.

There is little to no significant political risk flashing red in Irish bond prices, senior experts have said, although that might change in the event that a hung Dáil leads to a prolonged period in forming a new government.

Debt issuer the National Treasury Management Agency sold €1bn of 10-year debt to investors yesterday at a yield or interest rate just below 1%, reflecting in part the worldwide flight to safety into government securities, as stock markets tumbled again.

The costs of borrowing for Ireland and other eurozone countries leaped yesterday, European stockmarkets sank, and the euro surged against the dollar and sterling.

Investors sought safety in low-risk government debt yesterday after Turkish jets shot down a Russian warplane near the Syrian border, while European tourism-linked stocks fell after a US travel warning due to “increased terrorist threats”.

Irish elections will soon loom large for investors as political uncertainty yesterday helped send the borrowing costs of Portugal and Spain significantly higher.

Most eurozone bond yields fell yesterday, including the cost of borrowing for the Irish Government, after ECB policy makers hinted at their readiness to modify or expand their unprecedented stimulus programme should market turbulence warrant further action.

Taking stock after a month of crisis, analysts said yesterday that most European bond yields, including Ireland’s, have weathered well as fears about the Greek exit abated, while the euro has weakened against sterling as the UK interest rates rise draws closer.

After pursuing the toughest of tough negotiating lines, markets declared Angela Merkel and German bonds the victors from the weekend EU leaders’ summit by granting Greece a new €86bn bailout for three years without conceding to the demands of Greek leader Alexis Tsipras.

With eurogroup finance ministers talking tough and still no deal sealed with Greece by yesterday evening, investors are being warned of choppy waters ahead for markets in the coming days.

Market hopes for a Greek deal went on something of a roller coaster ride as initial pessimism turned to hopes after confirmation that Greece would likely table its formal bailout plan to the European authorities later today.

Whether Greece stays in the eurozone remains a question of no little importance to Europe and the future prosperity of the Greek people. 

Volatility continued to hit the Irish bond market and the euro, as investors waited nervously for news on whether Greece and its creditors would fall short in negotiations over its repayments to the IMF.

The National Treasury Management Agency sold €4bn of seven-year debt yesterday, covering around a third of its planned issuance for the year and refinancing at record low rates some of the funds that kept its economy afloat in 2010.

Bank of Ireland is expected to announce a preference share repayment deal within the coming days, despite confusion arising yesterday as to the full extent of money it may need to cover loan losses.

The fact that Irish banks do not require any further capital could tip Moody’s into upgrading Ireland’s sovereign credit rating.

Ireland’s debt agency may seek to sell a syndicated bond through banks as early as next week after the Government’s borrowing costs fell in the wake of an accord to ease its bank bailout burden, analysts said.

THE Government is considering wiping out the value of some junior bonds in Bank of Ireland (BoI) to ensure the lender generates €350 million in additional capital by the end of this year.