MNI China Daily Summary: Wednesday, June 19

MNI BRIEF: Rate Changes Affect Eurozone More Than US Firms-ECB

MNI BRIEF: BOJ May Real Export Index Drops 1.4% M/M

MNI BRIEF: PBOC, MOF To Promote Treasury Trades Progressively

MNI: PBOC Net Injects CNY276 Bln Via OMO Weds; Rates Unchanged

CHINA PBOC CONDUCTS CNY278 BILLION VIA 7-DAY REVERSE REPOS WEDS

US MBA: REFIS -0.4% SA; PURCH INDEX +2% SA THRU JUNE 14 WK

MNI: US MBA: MARKET COMPOSITE +0.9% SA THRU JUN 14 WK

MNI: EUROZONE APR CONSTRUCTION OUTPUT -0.2% M/M, -1.1% Y/Y

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

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

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

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

/EGBS: Goldman: Retail Bid Only A Second-Order Near-Term BTP Risk

BTP
HomepageBond Market NewsBulletMarketsFixed Income Bullets

Goldman Sachs are not particularly concerned by disappointing demand at last week’s BTP Valore offering. They highlight a few points:

  • “Italian households’ financial wealth does not seem like a binding constraint; their allocation towards fixed income remains low from a historical perspective.”
  • “We do not think fluctuations in retail demand are key to price-setting in European sovereign credit. Rather, the experience of this cycle has shown global credit risk appetite and rates volatility to be a much more reliable guide to pricing.”
  • “That said, over-reliance on retail demand may have the effect of shortening WAM and creating rollover risk in the future, but we see these as long-term rather than tactical risks.”
  • “We do see potential for increased spread volatility in coming weeks, especially in OATs as the S&P rating action nears. But in our macro baseline of economic recovery and declining inflation, we think the risk of a sustained widening is contained. We continue to see relatively better value in long Bonos vs semi-core or BTPs.”
167 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.

Goldman Sachs are not particularly concerned by disappointing demand at last week’s BTP Valore offering. They highlight a few points:

  • “Italian households’ financial wealth does not seem like a binding constraint; their allocation towards fixed income remains low from a historical perspective.”
  • “We do not think fluctuations in retail demand are key to price-setting in European sovereign credit. Rather, the experience of this cycle has shown global credit risk appetite and rates volatility to be a much more reliable guide to pricing.”
  • “That said, over-reliance on retail demand may have the effect of shortening WAM and creating rollover risk in the future, but we see these as long-term rather than tactical risks.”
  • “We do see potential for increased spread volatility in coming weeks, especially in OATs as the S&P rating action nears. But in our macro baseline of economic recovery and declining inflation, we think the risk of a sustained widening is contained. We continue to see relatively better value in long Bonos vs semi-core or BTPs.”