Verbania forwomen

[Althea Spinozzi @Altheaspinozzi]

Yesterday, the VIX rose the most in 2y in percentage terms (yellow), yet the junk bond market didn't care to react (white).

The Fed killed volatility in the credit space. Zombies don't bother if the market falls -they apparently have the liquidity to survive any shock
@saxobank

[Althea Spinozzi @Altheaspinozzi]

*The Commodity Bull Market

Energy junk bonds are offering the highest spread in the bond market. This space is poised to benefit from recovering energy prices and the market's desperate hunt for yield.
https://t.co/sl76VL2fOn
@SaxoStrats @SoberLook @saxobank @saxomarkets

[Althea Spinozzi @Altheaspinozzi]

*Treasuries are bad*
The spread between 2s10s hits 100bps for the first time since May 2017. Treasury yields rise amid news related to the fiscal bill. In the month of January, Treasuries suffered a loss of 1%, 10+ maturities suffered a loss of 3.7%.
@SaxoStrats

[Althea Spinozzi @Altheaspinozzi]

*Draghi Effect= sudden tightening of the BTP/Bund spread that might occur if Draghi becomes Italy's PM

10y BTP yields could fall between 12 and 19bps on the news representing a capital gain of 2%. 30-year BTPs can go up as much as 7% but more gradually https://t.co/7LecpgFzZ2

[Althea Spinozzi @Altheaspinozzi]

*Mario Draghi summoned by President Mattarella tomorrow to begin talks to form a new government of national unity.

Ready for the Draghi effect?

@SaxoStrats @saxobank @lauranaka @antocinelli @stefanobernabei

[Althea Spinozzi @Altheaspinozzi]

Without new fiscal stimulus the ECB is the only game in town. The central bank will be forced to add stimulus causing more spread compression in the Euro-area.

And then, there is Draghi....

🇮🇹 $BTP10 🚀🚀🚀 #draghieffect

[Althea Spinozzi @Altheaspinozzi]

*The Draghi effect

Ten-year BTP yields fell 7.5bps on open. Per our analysis, they should fall between 12bps and 19bps if he's confirmed to lead the government. Read more on https://t.co/ByqfbXKDzb

#draghieffect #draghiPremier

@SaxoStrats @saxobank

[jeroen blokland @jsblokland]

The #Draghi effect! #Italy's stock market spikes as Draghi tapped for Prime Minister.

[Althea Spinozzi @Altheaspinozzi]

As the #Draghieffect pushes sovereigns of the periphery higher, #Portugal is looking to issue 30y Portuguese Government Bonds (PGB) with 2052 maturity. The current yield on existing 2045 PGB is 0.78% -in Jan 2012 they were paying more than 11% in yield.

@SaxoStrats @saxobank

[Althea Spinozzi @Altheaspinozzi]

The Italian National Institute of Statistics will include masks and hygienizing hand gel in the inflation basket for 2021. A little bit too late, I remember last year at the beginning of the pandemic I paid €5 per mask due to shortage... a complete rip off

[Althea Spinozzi @Altheaspinozzi]

** Draghi accepts the job to form a technical government

The market is waiting for him to speak.

More upside ahead for $FTSEMIB and $BTP10

@SaxoStrats @saxobank

[Althea Spinozzi @Altheaspinozzi]

As #Draghi accepts the mandate to form a new government in Italy, bids for Portugal 30y PGBs exceed EU34 billion hitting a new record. Bids for the last syndicated 30y bonds in 2015 were around EU6 billion.

#Draghieffect @SaxoStrats @saxobank @antocinelli

[Althea Spinozzi @Altheaspinozzi]

*The reflation trade is back and alive

The yield on 30-year US Treasury yields hits 1.9% the highest since February last year as Senate Democrats put stimulus package on a fast track.

@saxobank @SaxoStrats

[Althea Spinozzi @Altheaspinozzi]

*Bank of England today to keep monetary policy on hold

Yet, the money market is positioning for lower rates as they expect economic forecasts to deteriorate. A rate cut may not be in the cards today, but it can be in the future.

@saxobank @SaxoStrats @MrMBrown

[Althea Spinozzi @Altheaspinozzi]

* Draghi faces challenges to form a new government

The 10-year BTP-Bund spread tightened considerably amid news regarding a Draghi government. Yet, only when he has succeeded to find an agreement between parties we will see the spread tightening below 2015 levels.

@SaxoStrats

[Althea Spinozzi @Altheaspinozzi]

Sign up to today's Bond Market Update to learn how to take advantage of bonds in 2021.

We will look at opportunities in USD and GBP bonds as well as trying to identifying risks ahead.

I look forward to seeing you. Sign up on https://t.co/sp5z7CijR2.

@saxomarkets

[Althea Spinozzi @Altheaspinozzi]

Iliad, a French telecommunication provider with operations in Italy, will issue €1.1bn in 3Y and 7Y bonds today. My guess is that they will come to the market tighter than expected because of the #Draghieffect. Expected MS is already 30bps down from IPT.

@saxobank @SaxoStrats

[Althea Spinozzi @Altheaspinozzi]

The 5s30s part of the US yield curve is now the steepest in 6-years. Holders of long-term US Treasury bonds are losing money by the day. Treasuries with 20+ maturity have already recorded a loss of 5.15% YTD.

Any inflation-sceptic still around?

@treehcapital @finomaniac

[Althea Spinozzi @Altheaspinozzi]

#Draghieffect

The 10y BTP-bund spread is about to touch 100bps. Yet, on a weekly basis, the BTP has gained more last week on Conte's resignation. Was the market pricing Draghi all along?

@SaxoStrats @saxobank @lauranaka @stefanobernabei

[Althea Spinozzi @Altheaspinozzi]

Is this a Zombie economy? YES. U.S. corporates net debt-to-Ebitda ratio has exponentially risen in the past few years to a level we didn't see for almost 20 years. Junk is junkier than ever before! @SaxoStrats @saxobank @treehcapital @finomaniac