AUCTION PREVIEW: Analysts Favor Owning Ireland vs France
Source: BFW (Bloomberg First Word)
Tickers
1266Z ID (Republic of Ireland)
2539Z GR (European Central Bank)
People
Marc-Henri Thoumin (Societe Generale SA)
Ioannis Sokos (BNP Paribas SA)
Jens Sorensen (Danske Bank A/S)
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UUID: 7947283
(Bloomberg) -- Ireland to tap 1% 05/2026 for EU1b 11am CET. Analysts see good value in owning Ireland vs France, given strong economic fundamentals and favorable fiscal position although election poses risks.
Alert: HALISTER1- SocGen (Marc-Henri Thoumin)
- 10Y has seen decent cheapening against shorter neighbors; 2022/2025 ASW slope particularly steepened this year
- Respite in European credit/sovereign complex on hopes of further ECB action should favor re-flattening
- Expect a reversal of recent underperformance vs OATs once election is out of the way; ECB easing in March should support Irish/semi-core convergence
- BNP (Ioannis Sokos)
- 10Y Ireland/OAT spreads too wide at 43bps; Irish bonds will continue being attractive in 2016 due to favorable fundamentals, supply position
- Recent widening of Irish spreads started before more general spread widening, due to the upcoming election risk, do not expect market unfriendly outcome
- Ireland has completed 40% of funding this year, EU5b-6b remaining vs EU13b in coupons, redemptions, plus ~EU8b in PSPP purchases
- Danske (Jens Peter Sorensen)
- Ireland has underperformed France in 10Y sector, despite solid economic fundamentals, recent upgrade from Fitch
- Concerns around general election, possible Brexit spillover has weighed on sentiment
- Continue to like long Ireland, given modest supply, ECB QE, strong fundamentals; buy Ireland vs France or Belgium
Source: BFW (Bloomberg First Word)
Tickers
1266Z ID (Republic of Ireland)
2539Z GR (European Central Bank)
People
Marc-Henri Thoumin (Societe Generale SA)
Ioannis Sokos (BNP Paribas SA)
Jens Sorensen (Danske Bank A/S)
To de-activate this alert, click here
UUID: 7947283