The document discusses the improved growth momentum in Europe, which is favorable for reflation trades and peripheral assets. It highlights the increase in duration supply in the periphery, which could lead to market volatility. The document maintains long EURSY breakevens, Bund ASW widener as a hedge, and shorts in the front-end of the eonia curve. It also discusses the risk premium in the US rates market and maintains USD2s5s steepeners. The growth momentum in the euro-area is improving, with positive Eurozone Flash PMIs and credit data. The document suggests that the improved economic outlook should benefit reflation trades and peripheral bond markets, especially in the context of QE.
doj/DataSet10/EFTA01385954.pdf
{}