Euro: OAT repricing keeps downside bias against US Dollar – MUFG

Halpenny argues that last week’s sharp widening of the OAT/Bund spread to 150 bps looked overdone, with French bonds now retracing from oversold levels as global fixed income selling eases. He sees Marine Le Pen’s aggressive consolidation plan as unlikely to materially change OAT risk ahead of next year’s election. MUFG expects EUR/USD downside risks to prevail.