Tap Auction, BEI Rates Plunge
Danske Markets | Oct 22, 2014 08:07AM ET
This week the Debt Office holds a tap auction in the 3Y bond, 2017-06-01, SGBi3107. SEK1bn is offered to the market. Following the much lower than expected CPI data last week, BEI rates have plunged by some 12-25bp depending on maturity since the previous auction. Swedish linkers have been trading expensively compared with European peers. However, following the recent move, Swedish BEIs look more neutral, at least if you expect Sweden to be more successful than the ECB at countering deflation impulses. A comparison between the two areas’ relative real economies should support such a notion.
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