MNI China Daily Summary: Monday, July 1

MNI BRIEF: PBOC To Borrow CGBs In Response To Market Situation

MNI BRIEF: Caixin June Manufacturing PMI Hits Three-year High

MNI: PBOC Net Drains CNY48 Bln Via OMO Mon; Rates Unchanged

CHINA PBOC CONDUCTS CNY2 BILLION VIA 7-DAY REVERSE REPOS MON

MNI: US MAY CONSTRUCT SPENDING -0.1%

MNI: US ISM JUN MANUF PURCHASING MANAGERS INDEX 48.5

US JUNE MANUFACTURING PMI 51.6 (51.7 FLASH, 51.3 MAY)

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

BONDS: Natixis Recommend DSL/EU-bond vs Bund Tightener

BONDS
BulletFixed Income Bullets

Natixis opt to fade recent widening of 10-year EGB spreads to Bunds following the French first round election results.

  • “Results from the first round of French legislative parliamentary elections seem to support our baseline scenario and should help a tightening of the best rated curves in the EGB / SSA space”.
  • “We therefore go long EU and Nether in fly against Bund [10-year maturity], on a risk-weighted basis (52 % Nether and 48% EU) at 90 bp. We target 75 bps during a 3-month horizon and stop at 98 bps”.
  • They note that earlier widening was warranted “to hedge against unexpected risk and reflecting a market liquidity premium, as much as a convenience yield (aka funding liquidity) increase”.
  • Natixis’ baseline scenario for the French election was “that of an absence of an absolute majority for any of the three main blocs in the French National Assembly”.
142 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

Natixis opt to fade recent widening of 10-year EGB spreads to Bunds following the French first round election results.

  • “Results from the first round of French legislative parliamentary elections seem to support our baseline scenario and should help a tightening of the best rated curves in the EGB / SSA space”.
  • “We therefore go long EU and Nether in fly against Bund [10-year maturity], on a risk-weighted basis (52 % Nether and 48% EU) at 90 bp. We target 75 bps during a 3-month horizon and stop at 98 bps”.
  • They note that earlier widening was warranted “to hedge against unexpected risk and reflecting a market liquidity premium, as much as a convenience yield (aka funding liquidity) increase”.
  • Natixis’ baseline scenario for the French election was “that of an absence of an absolute majority for any of the three main blocs in the French National Assembly”.