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6 May 2015
Sell off in core debt markets continues – Danske Bank
FXStreet (Edinburgh) - Senior Analyst at Danske Bank Jens Pedersen noted the increasing selling pressure around debt markets in Euroland.
Key Quotes
“Core rates are still trading weak and spill-over from US increases yesterday fed through to the German curve, steepening it further and moving the 10y point above the level before the ECB started its bond purchases”.
“It is evident that this ongoing correction has turned the strong Q1 dynamics around with Bunds suddenly reacting to US rates again and using even small movements in other markets to sell off”.
“Although timing the high in rates is not easy, we think there is a limit to how much more rates should increase with the fundamental picture unchanged and ECB bond purchases still having 17 more months to go”.
Key Quotes
“Core rates are still trading weak and spill-over from US increases yesterday fed through to the German curve, steepening it further and moving the 10y point above the level before the ECB started its bond purchases”.
“It is evident that this ongoing correction has turned the strong Q1 dynamics around with Bunds suddenly reacting to US rates again and using even small movements in other markets to sell off”.
“Although timing the high in rates is not easy, we think there is a limit to how much more rates should increase with the fundamental picture unchanged and ECB bond purchases still having 17 more months to go”.