EZ Bunds to return to trading range

If July's significant net issuance numbers does not translate into a reversal of the recent move higher in yields, the ECB would be forced into a downward revision of its inflation forecasts in September. 

The important message from the ECB's last press conference was therefore not the indifference to bond market volatility, but the emphasis on the asymmetry of the policy response function. 

Bunds in a 50-75 bp trading range for the remainder of the year, forecasts Bank of America. 

This makes us near-term bullish. We revise on the other hand our forecasts for 30y Bunds on the basis of the increased directionality of 10y-30y in selloffs.