J.P.Morgan: Enter Long 10Y Ireland Vs. France

J.P.Morgan write “in Ireland, we recommend scaling back into overweight 5-10Y vs. France on attractive valuations and the favourable Irish supply picture.”

• “Irish bonds have underperformed relative to France since we closed our overweight 5Y Ireland vs. France recommendation in early March.”
• “The Irish underperformance is likely on back on anticipation of the upcoming bond auction.”
• “We see fair value for Ireland around 10-20bp through France on fundamental and liquidity considerations.”
• “After the recent underperformance, Irish bonds in the intermediate sector are now trading 10bp or less through France thereby providing an attractive opportunity to scale into overweights. “
• “On supply front, Ireland has already covered 43% of their 2024 gross funding needs and they will be roughly 60% done by the end of this week.”
• “The remaining needs will be covered via 2-3 auctions over rest of 2024.”