AUCTION PREVIEW: German 30Y Seen Supported by Yields Around 1%
Source: BFW (Bloomberg First Word)
People
Antoine Bouvet (Mizuho Financial Group Inc)
Benjamin Schroeder (Commerzbank AG)
Edoardo Campanella (UniCredit SpA)
Hendrik Lodde (DZ Bank AG Deutsche Zentral-Genossenschaftsbank)
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UUID: 7947283
(Bloomberg) -- Germany to sell EU1b 2.5% 08/2046 bond at 11:30am CET. Analysts see recent rise in 30Y yields as supportive, though there’s some concern investor appetite may weaken ahead of upcoming FOMC decision.
Alert: HALISTER1- Mizuho (Antoine Bouvet)
- Yield of ~1% should attract outright demand; limited size of auction should allow market to easily absorb supply
- 10s30s spread is correctly priced; In micro RV, spread vs old benchmark has been stable since end of March
- Commerzbank (Benjamin Schroeder)
- Selloff in EGBs, 10s30s steepening has pushed 30Y Bund yields above 1%
- 10s30s steepening started to fade yday, even as yields rose; suggests stabilization as ultra-long supply from semi-core sector is increasingly cleared
- DZ Bank (Hendrik Lodde)
- Investor participation may be reduced ahead of the FOMC decision this evening; demand could be anemic, despite the recent run-up in yields
- UniCredit (Edoardo Campanella)
- Risks are skewed toward higher yields; ultra-long end may attract some interest due to the need for liability matching
- Absolute level of barely above 1% looks strange given it implies a negative expected real rate over next three decades
Source: BFW (Bloomberg First Word)
People
Antoine Bouvet (Mizuho Financial Group Inc)
Benjamin Schroeder (Commerzbank AG)
Edoardo Campanella (UniCredit SpA)
Hendrik Lodde (DZ Bank AG Deutsche Zentral-Genossenschaftsbank)
To de-activate this alert, click here
UUID: 7947283