HALISTER1: Maintain Long Exposure to EGBs Amid Negative Supply, BNP Says

Maintain Long Exposure to EGBs Amid Negative Supply, BNP Says

(Bloomberg) -- Maintain outright long exposure to EGBs market as improvement in supply conditions should lead to a continuation of rally in the coming week, BNP strategists Patrick Jacq and Eric Oynoyan write in client note.
  • Large negative net supply for remainder of the month should push down bund implied premium, may lead to further 15bps rally
  • Long-end has now absorbed large amount of supply, front-end remains pinned, more positive bias will support curve flattening
    • Maintain a EUR 10Y swap receiver, target 25bps, stop 59bps
    • On the curve, maintain 5Y/15Y OAT and 10Y/30Y BTP flatteners
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Eric Oynoyan (BNP Paribas SA)
Patrick Jacq (BNP Paribas SA)

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