Covered investors face supply drought but better opportunities at hand
Investors are sitting on plenty of cash but have little opportunity to do anything with it in the covered bond market as supply prospects look set to worsen. But with Bund yields breaking up from a long held range on Thursday and the possibility of the European Central Bank scaling back covered bond purchases, there are likely to be better buying opportunities at hand.
The 10 year composite Bund yield rose to 0.54% on Thursday breaking out of a range that had been in place since November last year. There is a belief that yields will head higher still as a result.
Analysts at UBS acknowledged the breakout and said, in
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