"Explosive" September Straight Ahead

If you thought August had more than enough events to crush the best laid vacation plans of Wall Streeters and men, you ain't seen nothing yet. Presenting "explosive" September.

Here is a compendium recap, courtesy of Bloomberg, of the key events that may shake global markets in the next 30 days:

Global event risks this month including Fed tapering, Berlusconi debate and German elections may favor turning neutral on core govt bonds from short positions, analysts say. UBS says turn underweight govt bonds as Fed taper will lead to higher rates. Other events to keep an eye on are the unresolved Syrian situation, a potential announcement of Bernanke's successor, the budget/debt ceiling impasse which likely will remain a non-issue until the last minute in October, ongoing emerging market tremors.

  • Sept. 5: BoE, ECB announce monetary policy decisions
  • Sept. 6: U.S. Aug. change in nonfarm payrolls
  • Sept. 9: Italy Senate committee to start debate on Berlusconi’s expulsion after his tax-fraud conviction
  • Sept. 13: Euro-area finance ministers meet
  • Sept. 16: Portugal EU/IMF aid review mission starts
  • Sept. 18: FOMC meeting with rate decision and economic projections being released
  • Sept. 22: Germany holds federal elections
  • Sept. 29: Portugal holds municipal elections


  • “Explosive” agenda in coming weeks favors core debt * Focus trades on 4/5Y sector of curves; German 5/10 steepener at 104bps attractive
  • See value in Belgian and Finnish 2/5 flatteners
  • Political risks and upward revision of issuance in Italy will continue to weigh on BTPs
  • Spanish debt may outperform Italy especially at short-end
  • Hold positive bias on Ireland in Sept. as may see positive Troika review and GDP figure

Goldman Sachs

  • Sept. risks back duration-neutral pose; favor Europe spreads
  • Stay long 10Y BTPs vs OATs into Italian senate hearings on Berlusconi; looks to reassess trade after Italy budget plans in late Sept.
  • Doesn’t expect outcome of German elections to lead to significant change in govt’s response to euro crisis

Credit Suisse

  • Selloff in 10Y bunds has been aggressive; September event risks favor neutral Euro duration positioning from short initiated at start of August
  • Sept. risks include Italy vote on Berlusconi, FOMC meeting and German elections
  • Look to sell bunds if rally seen toward 1.7% yield level; expect yield range of 1.7%/2% to be sustained until year-end

Societe Generale

  • Neutral duration for now; stay bearish into year-end as geopolitical tensions battle with U.S. data and Fed tapering
  • Rising oil prices, falling equities and further U.S. fiscal talks may hurt sentiment
  • Nascent euro-area recovery favors 1Y/1Y vs 1Y Eonia flatteners; scale back country spread compression trades


  • Heavy issuance and packed political agenda may result in widening of EGB spreads
  • Look to go long Spain vs Italy using SPGB supply concession this week as entry opportunity
  • Lift bund yield forecasts to 2.1% for 10Y sector at end 2013
  • Higher German yield environment may still see rise in peripheral yields, with spreads narrowing
  • Higher German yield environment may still see rise in peripheral yields, with spreads narrowing


  • Turn underweight govt bonds from neutral position held over summer, as tapering will push rates higher
  • Negative on Treasuries, bunds, gilts and JGBs; overweight high yield and underweight investment-grade

A summary calendar via RanSquawk:


And as a reminder, from Bespoke...