Commerzbank Rates Strategist Hauke Siemßen notes that the 30y Bund yields are testing their highest levels in 15 years, with bearish steepening dynamics in the market. The analysis highlights strong demand for recent syndications, particularly the BTP orderbook, which was notably robust. The report suggests that the market is well-prepared for upcoming auctions, indicating a cautious yet positive outlook.

30y Bund yields under scrutiny

"EGB yields are back at the highs with curves bear-steepening and 30y Bund yields testing the highest levels in 15 years."

"Nonetheless, the BTP orderbook of €157bn was super strong, indicating that there is sufficient investor demand at these valuations."

"While the bi-weekly SPGB and OAT auctions are still on the agenda tomorrow, markets are probably well-prepared for them and tenors only extend to 23y."

"We suggest holding on to BTPs longs for the time being given the positive carry environment amid supportive risk sentiment."

"Potential for further positive rating action after S&P attached a positive outlook to its BBB+ rating last week."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)