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EUROZONE: John Normand of JP Morgan Chase says hefty eurozone refunding

in June/July will keep the market on its toes. In June, combined

redemptions total E215bn (E118bn sovereign/E97bn financial) and July's

redemptions total E275bn (E188bn sov and E87 fin). "Only a third

of sovereign issuance and a fifth of financial issuance is from the

periphery, but coming at a time when core markets are also generating

such high supply, there are decent odds that some auctions and

placements do not run smoothly," he says. Peripheral spread widening of

only 10-20bp per month may limit contagion, creating an environment such

as that seen pre-May, where the euro slips, yet underperforms

high-yielders, commodity FX and Scandinavia and volatility remains

stable. However "more dramatic widening (50 bps in a month), runs the

risk of turning this bond market repricing into a systemic issue as it

did in May, which sinks euro dollar, but drives it higher on the crosses

as volatility surges again and carry trades are unwound," Normand says