India Yield Curve to Bull-Steepen as RBI Shifts to Cuts: HSBC
Source: BFW (Bloomberg First Word)
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Himanshu Malik (HSBC Securities Asia Ltd)
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(Bloomberg) -- Yield curve is likely to bull steepen as the central bank shifts from bond buybacks to monetary easing, HSBC strategist Himanshu Malik writes in note.
Alert: HALISTER1- Temporary shortage of cash will probably be disinflationary and drag on economic growth; should encourage RBI to cut rates
- More bullish on front-end of yield curve; receive 1-yr 1-yr NDOIS tactically to position for further RBI easing
- RBI unlikely to conduct open market operation purchases of bonds in 2017 with liquidity deficit in banking system close to neutrality or slightly in surplus
- Profit taken on long 10-year bond recommendation
- Recommend buying 5-year govt bonds
- 10-year bond yields to decline to 6% by end-2017, 5-year yields likely to decline more significantly to 5.3%
- NOTE: 10-year yield down 3bps at 6.29%, 5-year steady at 6.25%
Source: BFW (Bloomberg First Word)
People
Himanshu Malik (HSBC Securities Asia Ltd)
To de-activate this alert, click here
UUID: 7947283