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/ASWS: Fading From Last Week’s Extremes

BUNDS

Some of the “risk-off” flow surrounding the French political uncertainty has faded, with German ASWs a little tighter on the day.

  • The intraday move is fairly parallel across the ASW curve at this stage.
  • This comes after a move away from multi-year tights/key psychological levels last week.
  • We noted that sell-side tightener recommendations/existing positioning probably factored into last week’s notable spread widening, as French political uncertainty reverberated.
  • Commerzbank continue to prefer long Schatz ASW positions vs. the rest of the curve in this space.
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Some of the “risk-off” flow surrounding the French political uncertainty has faded, with German ASWs a little tighter on the day.

  • The intraday move is fairly parallel across the ASW curve at this stage.
  • This comes after a move away from multi-year tights/key psychological levels last week.
  • We noted that sell-side tightener recommendations/existing positioning probably factored into last week’s notable spread widening, as French political uncertainty reverberated.
  • Commerzbank continue to prefer long Schatz ASW positions vs. the rest of the curve in this space.