with the government failing to approve fiscal measures and/or
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pressures on GDP could increase if the political scenario
and a stronger fiscal adjustment in 2016
as a resolution to the political paralysis could
FX & EM 2017 Year Ahead | 16 November 2016
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FX & EM 2017 Year Ahead | 16 November 2016
the 10yr is expected to be anchored and movement is expected
the BoJ may lower the 10yr JGB yield target
we expect long-term JGB purchase operations to be
he did not believe they would have to be lowered. He
JGB yield guidelines are probably around 0% for
taking into consideration negative effects of
rather than debt reduction (Chart 73). The cyclical
and the low debt service costs enjoyed in the past five
we recommend buying 30s50s flatteners in BTPs as the
and elections in France and Germany in 2017).
particularly in the 2030-38 maturity bucket.
are very cheap versus OIS and Libor swap rates.