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Fasdal: How to trade this Greek uncertainty

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The market is really heating up, says Saxo's Head of Fixed Income, Simon Fasdal. He's referring to the continuing uncertainty over Greece and the deadlock between it and its creditors. Greek three-year government bond yields are now trading above 28%, while 10-year yields are above 13%. But Fasdal reminds us that back in 2012, the 10-year yields were up at 35%.

Despite the ongoing concern, Simon says the market is almost ignoring the risk of contagion. He says that's partly because there hasn't been much headline risk. He also believes that QE is having a deep impact in both European equities and bonds with the market already looking beyond Greece.

So how best to trade this uncertainty? Simon admits it's a difficult call at the moment but says he still favours going long bunds in the short-term as a cheap insurance against any big sell-off in equities. Longer term he's looking at being long European equities, once Greek risk has disappeared.