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10-Year Swap Spreads Off Yesterday’s Cycle Tights, Parallels With ’17 Move Noted

OAT

Political uncertainty has also showed up in OAT swap spreads in recent days, with the move off yesterday’s fresh cycle tights coming alongside a move off fresh cycle wides in OAT/Bunds.

  • The 10-Year swap spread tightened to levels not seen since ’17 on Tuesday, but last shows the best part of 10bp off’17 tights (and 5bp off yesterday’s tightest levels).
  • The ’17 tights correspond with the time that Frexit worry and RN popularity peaked in the ‘17 election cycle, drawing some obvious comparisons when it comes to the recent move.
  • Local matters have taken over from the broader EGB-/ECB-driven spread tightening.

French 10-Year Swap Spread (bp)

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Political uncertainty has also showed up in OAT swap spreads in recent days, with the move off yesterday’s fresh cycle tights coming alongside a move off fresh cycle wides in OAT/Bunds.

  • The 10-Year swap spread tightened to levels not seen since ’17 on Tuesday, but last shows the best part of 10bp off’17 tights (and 5bp off yesterday’s tightest levels).
  • The ’17 tights correspond with the time that Frexit worry and RN popularity peaked in the ‘17 election cycle, drawing some obvious comparisons when it comes to the recent move.
  • Local matters have taken over from the broader EGB-/ECB-driven spread tightening.

French 10-Year Swap Spread (bp)

Keep reading...Show less