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11 May 2015
Bunds might remain neutral – KBC
FXStreet (Barcelona) - The KBC Bank Research Team believes bunds have found a short-term equilibrium and hence remain neutral.
Key Quotes
“Today’s eco calendar is empty apart from the Euro group meeting on Greece. We favour cautiousness into the meeting and ahead of the IMF repayment deadline. That’s a positive for the Bund while peripheral spreads could be under some upward pressure.”
“The Bund is still in oversold conditions. Last week, we argued that Thursday’s move smelled like a short-term exhaustion move. In yield terms, the 10-yr yield tested the 38% retracement level of the down leg that started in January 2014 (0.78%).”
“We believe a new short term equilibrium will be found around current levels and don’t expect an immediate return either to the highs or the lows.”
Key Quotes
“Today’s eco calendar is empty apart from the Euro group meeting on Greece. We favour cautiousness into the meeting and ahead of the IMF repayment deadline. That’s a positive for the Bund while peripheral spreads could be under some upward pressure.”
“The Bund is still in oversold conditions. Last week, we argued that Thursday’s move smelled like a short-term exhaustion move. In yield terms, the 10-yr yield tested the 38% retracement level of the down leg that started in January 2014 (0.78%).”
“We believe a new short term equilibrium will be found around current levels and don’t expect an immediate return either to the highs or the lows.”