HALISTER1: Spain Socialist Party Revolt Not Yet a Reason to Buy SPGBs: Rabo

Spain Socialist Party Revolt Not Yet a Reason to Buy SPGBs: Rabo

(Bloomberg) -- The spread of 10Y SPGBs vs bunds has failed to sustainably break through the 100bp mark since late 2014, suggesting it represents some form of structural floor and that there’s little upside at current levels, Rabobank analysts write in client note.
  • The weekend’s political developments may improve sentiment in SPGBs near term
    • Still favor shorting peripheral spreads given glut of risks ahead in both the periphery and beyond, including Italy’s referendum and concerns over Europe’s banks
  • NOTE: After nine months, two elections and a dramatic revolt in the 137-year-old Socialist party, events over the weekend may allow acting PM Rajoy to take office for a second term
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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