November 18, 2024 09:37 GMT
EGBS: Mixed Performance Amid Hawkish ECB Repricing, Idiosyncratic Factors
EGBS
10-year EGB spreads to Bunds are mixed this morning, with Irish bonds outperforming on positive Friday ratings action and DSL spreads widening amid an uptick in political uncertainty.
- The 10-year IRISH/Bund spread is ~1bp tighter at 29.5bps, aided by S&P’s Positive outlook revision on Friday after hours (rating affirmed at AA). S&P referenced Ireland’s “extraordinary fiscal overperformance” as rationale for the outlook upgrade.
- Danske Bank “remain positive on Irish government bonds despite the solid performance in 2024 versus peers”, seeing “room for more tightening” to Bunds beyond current levels.
- Meanwhile, 10-year DSL spreads to Bunds are 2.5bps wider at 22.5bps, even as the Dutch coalition avoided collapse following crisis talks last Friday (see here).
- 10-year peripheral (ex-Ireland) and OAT spreads to Bunds are biased a little wider, with ECB-dated OIS seeing light hawkish repricing this morning (141bps of easing priced through Dec’25 vs ~145bps at Friday’s close).
- Eurozone September trade balance data is due at 1000GMT/1100CET, with more focus on today’s ECB Executive Board speakers this afternoon (Lane and Lagarde).
167 words