Halister News

(Bloomberg) -- Pioneer Investments is in favor of increasing Italy duration risk while not boosting country risk, head of government bonds Cosimo Marasciulo says in a phone interview, amid report the treasury has spoken with large investors about a 50-year bond sale.

• “It makes sense to buy the longer end of the curve against the shortest one, not to increase the country risk; this is what we would do with an Italian ultra-long bond,” he says
• Pioneer says would consider the long-end bonds sale and its interest would depend on market demand
• Long part of the curve very interesting as ECB currently doesn’t buy beyond the 30-year duration; the sector would benefit from a tweak in ECB purchases which could be announced at today’s meeting
• ECB today “a close call"; the central bank could extend QE program, but it also has to address the bund scarcity issue
• Pioneer took profit on a long Italy trade opened after Brexit as the scope for further gains is limited; now neutral on the country, planning to go into the last quarter of the year with a neutral stance on peripherals given rising political risk in the area, including Italian referendum on Constitutional reform

• NOTE: Italian treasury has spoken with large investors in recent weeks about its first ever 50-year bond sale, WSJ reported earlier
• NOTE: Italy could face poor demand for 50-year bonds because yields are already very low and political uncertainty, according to Natixis