Analysts at Nomura write that the term.....>

ECB VIEW: Analysts at Nomura write that the term of the ECB taper could be

determined by technical factors - principally the ability of the markets to

withstand more QE and the German repo to ECB deposit facility spread. 

- They write that if this "spread widens or the quarter-end spikes begin to

increase once again, then the time over which a taper extends will have to

shorten or the taper will have to be performed in combination with other policy

innovations to address the front-end."

- Speculating on the types of policy innovations, Nomura mentions "enhancements

to the Securities Lending Facility or eventually a Fed-style reverse repo

facility".

- For now they recommend "outright short on Bunds, Short 10y EUR rates vs. 10y

US via 6m10y payer swaptions, a bias to tighter 30y swap spreads and on the

shorter end 6m2y ATMF receiver swaptions and a paid position on May 2018 Eonia

contracts"