Given the dearth of market-moving economic data, ‘headline-watching’ especially regarding official comments about Greece should dominate today’s session.
The EFSF and the EU (EFSM) have announced ten new benchmarks to come to the market by year-end. Overall we look for a further €100bn of bailout bonds until 2013. Given that funding outlook we recommend switching out of the EFSF 2.75% Jul16 into similar dated Austrian and French paper.
Positioning ahead of the regional elections in Spain should not weigh on SPGBs so much that the upper end of the 10y Spanish spread range over Bunds is in big danger, especially as the near-term SPGB supply outlook has improved.
In outright terms we expect the Bund future to stay in its range of 123.59 (April upward trend) and 124.62 (Monday’s high).
In derivatives space we identify trade ideas in € and US$ space.
Click here to read the full report:
http://www.easyforexnews.net/uploads/2011/05/ES_0520e.pdf
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