Halister News

(Bloomberg) -- With long-end yields back close to their lows, tactically scale back strategic duration longs at the start of the new quarter, Commerzbank strategists including Christoph Rieger write in client note.

• Add duration again at 10Y bund yields above 0.25%
• Maintain core and peripheral tighteners heading into the larger PSPP purchases, expressed via 10Y DSL vs bunds in core; 10Y Italy in peripherals
• Expand constructive spread view amid the record backflows to investors expected during coming months
• EUR curve remains reluctant to price in further cuts despite the deliberate change of tone from the ECB since last week
  • With June ECB EONIA forwards just 2bp below current fixings, receiver positions offer a cheap option for another cut as the fixing could already drift lower on the back of rising excess liquidity