HALISTER1: Commerzbank Expects ECB Rate Cut in March vs December Previously

Commerzbank Expects ECB Rate Cut in March vs December Previously

(Bloomberg) -- With the ECB deliberately keen to choke off speculation about more stimulus, Commerzbank pushes back forecast for a 10bps rate cut to March, analysts Christoph Rieger and Michael Schubert write in client note.
  • When the central bank addresses QE’s scarcity limitations in December, it should opt for a slightly longer extension of the program until at least the end of 2017 in order to preclude a large bearish reaction
  • The net impact on bunds will still be mildly negative so lifts 10Y year-end yield forecast to 0.1% vs 0%
  • Favor increasing duration and increasing overweights in large peripherals; recommend overweights via Italy instead of Spain, given the latter’s outperformance and as sufficient political concern is reflected in Italian spreads near-term
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
2539Z GR (European Central Bank)

People
Christoph Rieger (Commerzbank AG)
Michael Schubert (Commerzbank AG)

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