HALISTER1: Favor Ireland Bond Spreads vs Spain on Politcal Outlook: SocGen

Favor Ireland Bond Spreads vs Spain on Politcal Outlook: SocGen

(Bloomberg) -- The Irish spread looks the better one to back, given greater likelihood of a stable govt in Ireland even if election news over the weekend was disappointing, Societe Generale analysts write in client note.
  • Both 10Y IRISH and SPGB spreads over bunds have been widening in tandem over past weeks amid political uncertainty and the risk-averse mood in markets
  • A coalition between Fine Gael and Fianna Fail parties remains the most likely option, although the risk of an unstable minority government or even a centre-left alliance is increasing
    • With many key politicians saying they don’t want to work with anyone else, the suspense is likely to continue up to and beyond when parliament meets on March 10
  • NOTE: Parliament is due to choose a prime minister on March 10; serious negotiations may not start until after that fails to produce a winner
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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