Free Trial
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.
BUNDS
Following yesterday's move by the German finance agency to ease repo market tensions:
- Commerzbank recommends 10Y Bund ASW tighteners targeting 70bp, (trading at 90bp currently, and 98.6bp going into the DFA's announcement) "with the DFA finally tackling Bund specialness and collateral supply set to rise significantly next year, both through net issuance and shifts in the €QE portfolio".
- They also note that there will be a bump in relative demand from index trackers due to the increase in Bund volume (even though the Bunds remain with the DFA), supporting Bunds into month-end, but subsiding thereafter. As such, "resilience in coming days should be used to scale into shorts."
- From a broader perspective, they saw the decision as "an attempt to preserve the Bund premium by signaling to the market that the transmission frictions (i.e. extreme specialness) is addressed and more drastic measures to address frictions are not needed (e.g introducing ECB bills which would challenge the status of Bunds as the core € risk-free asset)."
Bund ASW (bp)Source: BBG
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.
We are facing technical issues, please contact our team.
ok
Your request was sent sucessfully! Our team will contact you soon.
ok