Halister News

(Bloomberg) -- Use a rise in 10Y bund yields above 0.25% to scale back into longs with the historically high month-end index extension expected to provide additional support, Commerzbank strategists including Christoph Rieger write in client note.

• Expect bunds to rise with duration-intensive issuance increasingly recycled and Fed risks receding
• Firm anchoring of front-end rates and more balanced positioning render a re-run of last year’s selloff remote
• Curves should remain highly directional with even ultra-long curve and fly spreads shrugging off the structural increase in longer-dated issuance as investors have to ‘hunt for duration’
• Accordingly, expect 10s30s bund and IRS curves to resume their flattening trend with the bear-steepening/bull- flattening entrenched