HALISTER1: Buy 5Y BTPei Breakevens vs Bundei as Cash Flows Approach: Citi

Buy 5Y BTPei Breakevens vs Bundei as Cash Flows Approach: Citi

(Bloomberg) -- Recent underperformance of BTPei21/22 real yield vs Bundei23 has taken the breakeven spread to historically attractive levels, Citigroup strategists including Aman Bansal write in client note.
  • Buy BTPei21 breakeven vs Bundei23 at -12bp, target +2bp, stop -19bp
  • Scope for reversal as BTPei cash flows approach; EU1.7b of BTPei coupons and EU9.8b of the BTPei16 redemption
  • Germany is the only EMU issuer that has not issued a new 5Y linker this year
  • Any new 5yr Boblei launch prompted by this cross-market richness might weigh on the Bundei
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Aman Bansal (Citigroup Inc)

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