AUCTION PREVIEW: 5Y Germany Trades Below Depo Rate, Rich in ASW
Source: BFW (Bloomberg First Word)
People
Nishay Patel (UBS Global Asset Management Japan Ltd)
Antoine Bouvet (Mizuho Financial Group Inc)
Benjamin Schroeder (Commerzbank AG)
Martin Van Vliet (ING Groep NV)
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UUID: 7947283
(Bloomberg) -- Germany to sell 0% 04/2021 Bobl for EUR4b at 11:30am CET; analysts highlight the bond trades well below current depo rate, expensive on ASW, though cheap to fitted curve.
Alert: HALISTER1- UBS (Nishay Patel)
- 5Y Germany trades at record low levels, below ECB depo rate; on the curve looks rich relative to 3s, 7s
- Cross-market, bobl is at expensive end of range vs other core, also historically rich on ASW
- Mizuho (Antoine Bouvet)
- Bond initially met with lukewarm reception, currently sits as cheapest issue on fitted curve; trades close to flat on the roll, which is slightly rich vs prior issues
- Commerzbank (Benjamin Schroeder)
- German 5Y yields have dropped to record lows, close to -0.4%, as ECB easing expectations have risen; bobl now outside scope QE purchases, at least until next week
- In ASW, 5Y is at expensive end of range, close to -40bps vs -33.5bps at launch
- ING (Martin van Vliet)
- Despite yday’s 2bps uptick, 5Y still trades nearly 10bps through current ECB depo facility rate; markets priced for negative policy rate to persist for years
- 5Y bobl trades at 2bps concession to the German curve, which should help get the auction done
Source: BFW (Bloomberg First Word)
People
Nishay Patel (UBS Global Asset Management Japan Ltd)
Antoine Bouvet (Mizuho Financial Group Inc)
Benjamin Schroeder (Commerzbank AG)
Martin Van Vliet (ING Groep NV)
To de-activate this alert, click here
UUID: 7947283