Compression session

摘要

Remember those convergence trades in anticipation of the euro, when the likes of Italy saw their bond yields rally to levels close to those of Germany? We are seeing the same game again, as investors seek to take advantage of peripheral European sovereigns whose spreads are tightening against the core. The difference between 10-year Portugal and Germany, for example, is at its narrowest since April 2010, with the pick-up last week at 114bp. In January 2012 it was l,360bp. Portugal raised €4bn through an October 2028 bond issue a couple of weeks ago off books that peaked at nearly €19bn. Impressive stuff.