French-German 10-Year Bond Yield Spread Could Stabilize Around 100 Bps
Dow Jones
Sep 22
0512 GMT - The 10-year French OAT-German Bund yield spread is expected to consolidate around 100 basis points as the market adjusts to this new reality, HSBC's Chris Attfield says in a note. "There is little point in trying to draw 'lines in the sand' beyond which spreads will not rise, but 120 bps may be the next psychological level in any further spread weakness," the European rates strategist says. Eurozone yield spreads have been systematically widening in response to the surge in yields, but France's move is far larger than HSBC would expect given its debt/GDP, he says. The 10-year OAT-Bund yield spread widened to 105.5 bps on Friday; it closed at 100.7 bps on Monday, according to LSEG.
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