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21 May 2015
Bunds sell-off could have room to continue – Westpac
FXStreet (Edinburgh) - Strategist Richard Franulovich at Westpac believes the German Bunds could still have room to decline further.
Key Quotes
“Historical analogs suggest that the bund-led bond market sell-off may not be complete”.
“In 2003 JGB yields rose 120bp in the space of barely three months”.
“In 2013 US 10yr yields rose about 110bp in three months amid the then “taper tantrum”. Yields continued to rise back then for a full four months taking them a good 140bp higher”.
“Against these basic metrics the rise in bund yields appears to have further to run. Historical analogs suggest that we may be about half-way there both in terms of magnitude and duration”.
“Historical analogs warn that we should not expect a quick reversal either”.
Key Quotes
“Historical analogs suggest that the bund-led bond market sell-off may not be complete”.
“In 2003 JGB yields rose 120bp in the space of barely three months”.
“In 2013 US 10yr yields rose about 110bp in three months amid the then “taper tantrum”. Yields continued to rise back then for a full four months taking them a good 140bp higher”.
“Against these basic metrics the rise in bund yields appears to have further to run. Historical analogs suggest that we may be about half-way there both in terms of magnitude and duration”.
“Historical analogs warn that we should not expect a quick reversal either”.