/SWAPS: ASW Wider On NYC Bancorp Stress, Fundamentals Unchanged

The previously alluded to worry surrounding NYC Bancorp and resultant bid in core global FI markets allows German ASW spreads to widen a little.

• A reminder that seemingly ample collateral, perceptions re: low risk of meaningful ECB remuneration tweaks and the general ECB policy outlook have helped promote spread tightening in recent times.
• Demand for cash bonds around U.S. banking sector stress (even if it is isolated, as initially suggested) drives the spreads wider, with Schatz leading. Still, the seeming lack of systemic risk probably means that the move will not develop too much further given the aforementioned fundamentals.
• Most desk views that we have read remain biased towards further tightening, even if they have recommended taking profit on tighteners on the way.
• Buxl spreads are still a touch tighter on the day and have been the most willing to move away from spike session highs.