AUCTION PREVIEW: Curve Concession, Recent Selloff Support Bobl
Source: BFW (Bloomberg First Word)
People
Antoine Bouvet (Mizuho Financial Group Inc)
Benjamin Schroeder (Commerzbank AG)
Elia Lattuga (UniCredit SpA)
Martin Van Vliet (ING Groep NV)
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UUID: 7947283
(Bloomberg) -- Germany to sell 0% 04/2021 bonds for EU4b at 11:30am CET. Bobl has offered concession on the curve, rise in yields seen as supportive, analysts say.
Alert: HALISTER1- Mizuho (Antoine Bouvet)
- Expect recent recovery in bonds to continue, should benefit the auction
- In RV, bond has offered a good concession ahead of auction, adjusting for selloff impact; see bond has cheapened by ~1bp, much more than predecessors around their third respective taps
- Analysis suggests 5Y rolls outperform by average of 0.5bps in the days following the tap; expect some retracement of that auction concession
- Commerzbank (Benjamin Schroeder)
- 5Y yields edged above -0.30% in recent weeks, before falling below this lvl yday; would be the highest yield at auction since Feb.; still room left to the -0.40% ECB depo rate
- Unicredit (Elia Lattuga)
- Bond trades at around -0.3%, 10bps cheaper than mid- April lows; since then, 2s5s has steepened by ~6bps, 5s10s by 10bps, 2s5s10s sits towards the rich end of 2- month range
- Last tap was technically uncovered, sold just a few bps richer than current levels
- In relative value, looks attractive vs 01/2020 and 07/2020 bunds
- ING (Martin van Vliet)
- OBL 04/2021 still trades ~2bps concession to the curve, has remained PSPP-eligible despite yesterday’s 4bp rally to -0.33%
Source: BFW (Bloomberg First Word)
People
Antoine Bouvet (Mizuho Financial Group Inc)
Benjamin Schroeder (Commerzbank AG)
Elia Lattuga (UniCredit SpA)
Martin Van Vliet (ING Groep NV)
To de-activate this alert, click here
UUID: 7947283