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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.
EGBS
The 10-year OAT/Bund spread has widened over 4bps today, essentially closing last Friday’s gap tighter, as markets continue to assess the fallout from Sunday’s second round legislative election result.
- There remains little clarity how a stable coalition can be formed after the elections, prompting OAT futures to unwind much of yesterday’s gains.
- OAT futures are currently -85 ticks at 123.46, while Bund futures are -44 ticks lower today.
- Sell-side analysts have reiterated their cautious stance on OATs following the result, given ongoing political uncertainty and the risk of further fiscal slippage.
- Broad consensus (based on reactions we have seen) is for the 10-year OAT/Bund spread to remain within the 60-70bp range for now (vs 45-50bps before the snap election announcement).
- 10-year peripheral spreads to Bunds have widened alongside OATs today, with ongoing weakness in European equity futures supporting that move.
- Figure 1: 10-year OAT/Bund Spread (Source: Bloomberg)
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.
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