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OAT: 10s Above 3.20% For First Time Since Early November

OAT
CEEMEAEurozoneFranceBulletMarketsFixed Income Bullets

10-Year OAT yields above 3.20% for the first time since early November, with the continued presence of French fiscal & political risks driving some modest spread widening and more notable outright selling pressure today.

  • Broader core global FI weakness and an uptick in energy futures also factor in.
  • This comes after French PM Bayrou underlined his intention to cut the deficit in a relatively aggressive manner (a tactic that factored into the downfall of the previous government) over the Christmas break.
  • OAT futures -64 at 123.16, through the early November lows (based on a continuation chart). July 4 lows being tested at typing.
  • 10-Year yields as high as 3.216% this morning, with the next upside target located at the November 7 high (3.268%).
  • Spread to Bunds 1bp wider at 82bp, sticking comfortably within the 71.6-88.4bp multi-month closing range.
  • 10-Year SPGB/OAT/PGB fly little changed around -45bp, sticking to a 4bp range (based on closing levels) over the last couple of weeks. That compares to cycle closing lows of -55bp.
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10-Year OAT yields above 3.20% for the first time since early November, with the continued presence of French fiscal & political risks driving some modest spread widening and more notable outright selling pressure today.

  • Broader core global FI weakness and an uptick in energy futures also factor in.
  • This comes after French PM Bayrou underlined his intention to cut the deficit in a relatively aggressive manner (a tactic that factored into the downfall of the previous government) over the Christmas break.
  • OAT futures -64 at 123.16, through the early November lows (based on a continuation chart). July 4 lows being tested at typing.
  • 10-Year yields as high as 3.216% this morning, with the next upside target located at the November 7 high (3.268%).
  • Spread to Bunds 1bp wider at 82bp, sticking comfortably within the 71.6-88.4bp multi-month closing range.
  • 10-Year SPGB/OAT/PGB fly little changed around -45bp, sticking to a 4bp range (based on closing levels) over the last couple of weeks. That compares to cycle closing lows of -55bp.