Halister News

(Bloomberg) -- Current environment requires further caution on “buy-the-dip” mentality in peripherals; maintain neutral view on EUR duration and turn neutral on peripheral, semi-core spreads given poor risk/reward, writes Barclays strategists led by Cagdas Aksu in a client note.

• Neutral on EGB spreads given poor global macro backdrop, reduced market impact of further ECB easing, domestic political risks, market positioning
  • Pressure in credit markets means periphery paper more likely to be used as macro hedging tool; price action, rising open interest suggests this is happening in BTP futures
• Remain neutral EUR rates duration; bunds look towards rich end of range, though current resilience in duration unlikely to reverse quickly unless the macro outlook changes convincingly