Dec 01, 2016
Eurex
Italian Referendum creates trading opportunities in Eurex products
In the light of the upcoming referendum this Sunday, the divergence of yields between southern Europe's two biggest economies, Italy and Spain has continued to increase as the yield spreads have now reached a 5 year high.
Italian 10y vs German 10y government bond yields are at their highest since early 2014.
The significant underperformance of Italian govies in the last two months is largely a reflection of the higher political premium being priced in the run up to the Italian referendum.
Italy's new 50-year bond is another example of the challenge facing investors where we have witnessed a plummet in price by more than 12% in the past month.
In the run up to the result on Sunday, 4 December 2016, I suspect markets will be on tenterhooks with a pick-up in implieds highly likely.
Lee Bartholomew
Head of Fixed Income Product Research & Development
Eurex' Euro-BTP Futures are designed to provide traders and fund managers with a viable hedging tool in an environment of widening yield spreads between the sovereign bonds of European Union countries.
Euro-BTP Futures - Trading opportunities along the yield curve
- Spread trading against the Euro-Bund, Euro-Bobl and Euro-Schatz Futures
- Trading the short- and long-term points on the Italian yield curve to benefit from anticipated changes in the BTP yield curve
- Portfolio overlay using Euro-BTP Futures to increase the traders' and fund managers' possibilities in effecting changes in portfolio asset allocation, whilst leaving the existing portfolio intact
