Halister News

(Bloomberg) -- EUR yields are now vulnerable to upward pressure near term, although a durable bearish trend won’t develop, BNP Paribas strategists write in client note.

• Despite short-term market adjustment post-ECB, there are still good reasons to remain bullish on core EGBs until year-end
• The most important market driver for the next few months is QE-adjusted net supply, which by the end of the year will be negative by more than EU160b; October, in particular, is strongly negative at minus EU75b
• Real yields could fall further below zero and -- barring a surge in inflation expectations -- nominal yields remain low and may fall from near-term levels
• BNP sees a good opportunity to re-enter long positions after current correction
• Present curve steepening will be temporary