Risk of ECB Disappointment for EUR Rates Market Today, BNP Says
Source: BFW (Bloomberg First Word)
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2539Z GR (European Central Bank)
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UUID: 7947283
(Bloomberg) -- Recent price action in EUR rates market can only be driven by expectations for additional ECB accommodation to be announced today, BNP Paribas strategists write in client note.
Alert: HALISTER1- Risk of disappointment raises potential for 2Y-10Y spread to steepen
- Recent positioning is a bet on ECB decision being favorable for tighter spreads and bull-flattening
- Market reaction to any ECB QE extension beyond March 2017 depends on parameter changes to the purchase program
- Most likely outcome will be decision to allow purchases at yields below the deposit facility rate, which will fuel steepening pressures in core markets
- If ECB decides to increase purchase limit per ISIN, bull- flattening may intensify
Source: BFW (Bloomberg First Word)
Tickers
2539Z GR (European Central Bank)
To de-activate this alert, click here
UUID: 7947283