VIEW: Bank of America Research suggest that....>

EGBS: VIEW: Bank of America Research suggest that "markets are likely to greet

the (EuCo) deal with some relief given that the key political signals remain

intact. However, positioning is already long and spreads are, now, not far off

their 2019/2020 tights. As such longs in the periphery increasingly will need to

be justified via carry, rather than spread compression and capital gain

expectations. This makes volatility the main risk. Fundamentally, the macro

risks remain very large and the economic shock significant enough to leave

domestic politics in the periphery as a source of risk. Technically, we worry

about profit taking post agreement during summer illiquidity. Finally, the

periphery remains vulnerable to renewed virus outbreaks due to their unique

exposure to tourism and the attempt to restart the summer travel season. We

therefore continue to see value in low carry cost hedges such as Bund-ASW,

BTPei-Bund barbells and BTP flatteners."