HALISTER1: Lower Bund Yields Favor Steeper 10s30s Spanish Curve: SG

Lower Bund Yields Favor Steeper 10s30s Spanish Curve: SG

(Bloomberg) -- Further rally in bunds should favor a steeper 10s30s in SPGBs given the inverse correlation, Societe Generale strategist Marc-Henri Thoumin writes in client note.
  • Long SPGB April 2026 vs SPGB Oct. 2046 at 62bp in ASW; target 69bp, stop 57bp
  • 2044 SPGB/BTP spread has tightened by 12bp since March 21 making 30y SPGBs somewhat rich in relative terms
  • Recent performance also shows 30Y SPGBs have outperformed shorter-dated sectors of late
  • Expect issuance at the very long end to remain intense, at least as long as EUR yields remain close to recent lows
    • Demand for very long issuance is less supportive than last year but issuers are reportedly still prompt to extend the average life of debt further
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Marc-Henri Thoumin (Societe Generale SA)

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