- Spanish paper continues to underperform, with 2s spread wider by 3bps and 10s wider by 2bps in early trade.
- EUR/USD remains on a back foot, trades in close proximity to intraday option expiry level at 1.3050.
However analysts at Citi note - Looking at the different investor categories, we believe hedge funds seem to have a clear incentive to exchange new GGBs for EFSF Notes, given their entry levels is estimated to be significantly better than the rest of the investor landscape. Not only have HF established the bulk of their position most likely post-PSI, in our view, but also they have probably added to their risk over the past weeks.
According to Citi:
- Greek banks own around 25% of the EUR 62bln outstanding
- Hedge funds may have accumulated around EUR 22bln of new GGBs.
Print 07:56, 06 Dec 2012 - Market Analysis - Source: RANsquawk
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