U.S. Rates Rally Is Base Case for Tomorrow, RBS Says
Source: BFW (Bloomberg First Word)
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John Briggs (RBS Securities Inc)
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UUID: 7947283
(Bloomberg) -- Investors should buy UST 7Y “on a knee-jerk bearish move” in reaction to either BOJ or FOMC outcomes, taking 50% risk at 1.50%, adding 50% at 1.65%, strategists led by John Briggs say in note.
Alert: HALISTER1- Call is based on expectation that BOJ “will disappoint overly heightened market expectations for a ‘reverse- twist,’” and instead cut depo rate 10bp-20bp, expand QE and extend deadline for meeting 2% inflation target
- Kuroda won’t commit his credibility to idea that higher long-END rates advance progress toward inflation target
- FOMC will leave December in play via dot plot, with “little risk to the U.S. bond market,” as market-implied odds for hike this year are ~55%
- Following the decisions, investors “will look to deploy cash” at higher yields than they could a few weeks ago, while markets will shift focus to upcoming month that is “heavy with political risks”
Source: BFW (Bloomberg First Word)
People
John Briggs (RBS Securities Inc)
To de-activate this alert, click here
UUID: 7947283