HALISTER1: Better Greece Sentiment Supports Front-End Periphery EGBs: Citi

Better Greece Sentiment Supports Front-End Periphery EGBs: Citi

(Bloomberg) -- Key driver for peripheral euro-area bond spreads is the high DV01 of EGB supply but any further positive developments in Greece should be supportive particularly for front-end, Citigroup strategists including Aman Bansal write in client note.
  • Any improvement in Greece sentiment should most support the front-end, where supply pressure has been absent; supply is putting widening pressure on longer-dated periphery
  • Greek bonds have staged a significant recovery this week following reforms passed in parliament over the weekend and the progress made at Monday’s Eurogroup meeting
  • However, periphery spreads continue to widen despite positive developments in Greece, higher PSPP purchases and tighter credit spreads
  • EMU supply has totaled EUR 400m/bp already in 2016 with 24% of gross conventional issuance falling in the 15y+ sector
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Aman Bansal (Citigroup Inc)

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