Halister News

(Bloomberg) -- Expect PSPP expansion to support EGB spread tighteners vs bunds, BNP Paribas strategist Eric Oynoyan writes in client note.

• Long 10y OAT and 20y ATS, and long 30y BTP in the 10y/30y box to bunds
• In terms of outright positions, maintain a 2y swap receiver but waiting for a better level to re-enter a receiver on the EUR 10y outright and vs 5y and 30y
• Reduce exposure to market direction now; will enter longs once bunds become attractive
  • Supply and demand conditions favor slightly higher yields in weeks ahead; net supply in March will be positive at close to EUR 30b – the highest monthly level this year
• Bear steepening pressure is likely to develop on core EGB curves going into ECB if the risk-off continues to lose momentum