Halister News

(Bloomberg) -- Upcoming euro-area consumer price data will show that inflation is back to negative territory, which could support expectations for ECB rate cut, BNP Paribas strategist Eric Oynoyan writes in client note.

• Risk of a significant re-steepening correction is very low in the near term, but bull-flattening could lose some momentum in the weeks ahead
• Peripheral EGB spreads are unlikely to narrow significantly unless bunds sell off
• Given current bund richness, wouldn’t be aggressively bullish as inflation breakevens may have reached a floor, at least temporarily, which could prevent the rally in nominals from developing much further
• However, difficult to find a trigger on the agenda that could fuel a significantly bearish bias in the near term