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EGBS: J.P.Morgan Recommend Long 10-Year SPGB Vs. Bunds

EGBS
BulletEurozoneFixed Income BulletsMarkets

J.P.Morgan recommend “investors shift overweight intra-EMU exposure after the recent widening move and enter long 10-Year Spain vs. Germany.”

  • They note that “intra-EMU spreads have been under pressure since the December ECB meeting.”
  • They believe that “the widening was likely due to a combination of a relatively hawkish delivery from the ECB, heightened political uncertainty in France and liquidations of overweight tightener positioning. Also, the typical weak market liquidity around year-end likely exaggerated these moves.”
  • Furthermore, they “remain of the view that heavy January supply will be well digested by the market, especially given attractive valuations after the recent sell-off/spread widening.”
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J.P.Morgan recommend “investors shift overweight intra-EMU exposure after the recent widening move and enter long 10-Year Spain vs. Germany.”

  • They note that “intra-EMU spreads have been under pressure since the December ECB meeting.”
  • They believe that “the widening was likely due to a combination of a relatively hawkish delivery from the ECB, heightened political uncertainty in France and liquidations of overweight tightener positioning. Also, the typical weak market liquidity around year-end likely exaggerated these moves.”
  • Furthermore, they “remain of the view that heavy January supply will be well digested by the market, especially given attractive valuations after the recent sell-off/spread widening.”