Topic of the week: Where is the Bund going?
- ’s monetary policy has anchored yields at a low and stable level.
- As long as this policy remains unchanged, the Bund is to remain in a tight range of -0.65% to -0.35%.
- On a longer horizon however, a change in ’s stance could be associated with more sizeable curve moves.
- The fundamental value is more elevated, we find it North of 1% in the case of the Bund.
Market review: Euphoria and chaos
- Reflation trade collides with unrest in Washington
- Small caps, steepeners and TIPS outperform
- T-note yields rise to 1.10%
- Euro sovereign and credit down