AUCTION PREVIEW: Analysts See Value in 30Y Gilt vs 50Y
Source: BFW (Bloomberg First Word)
People
Adam Dent (Abbey Natl Treasury Services)
Francis Diamond (JPMorgan Chase Bank NA)
Parisha Saimbi (BNP Paribas SA)
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UUID: 7947283
(Bloomberg) -- U.K. to auction 3.5% 01/2045 for GBP1.75b at 11:30am CET. Analysts see value in long-end ASW, also vs ultra-longs ahead of 2065 syndication.
Alert: HALISTER1- BNP (Parisha Saimbi)
- 30Y looks cheap on the curve, expect 10s30s to remain steep until mid-May with heavy long-end supply; 30s50s likely to steepen ahead of the 50Y gilt syndication
- Long-end ASWs remain cheap, may attract demand from pension funds, cash offers better value in hedging long- end duration needs than swaps
- Santander (Adam Dent)
- Scope for long-end gilts to come under further pressure ahead of 2065 syndication; 5s30s curve looks fair, 30s50s too inverted
- Recommend buying 2045s at auction vs 2065s; target -10bps, stop -15bps
- 2045s has been consistently cheap on the curve, has seen some extra concession; long-end gilt spreads are tight, particularly compared to Germany, USTs
- Recommend buying 2045s on ASW vs 6m Euribor
- Scope for long-end gilts to come under further pressure ahead of 2065 syndication; 5s30s curve looks fair, 30s50s too inverted
- JPMorgan (Francis Diamond)
- Auction bond has richened vs surrounding issues in recent months, now close to most expensive historical lvls; absent of concession, see limited value in owning this bond
Source: BFW (Bloomberg First Word)
People
Adam Dent (Abbey Natl Treasury Services)
Francis Diamond (JPMorgan Chase Bank NA)
Parisha Saimbi (BNP Paribas SA)
To de-activate this alert, click here
UUID: 7947283