Buy UST 10Y, Targeting 1.60%, on Fed, Pattern: BNP Paribas
Source: BFW (Bloomberg First Word)
People
Daniel Tangho (BNP Paribas SA)
Timothy High (BNP Paribas SA)
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UUID: 7947283
(Bloomberg) -- With 10Y yield having risen nearly 25bp this month, “it is time to go tactically long,” BNP strategists Timothy High and Daniel Totouom-Tangho say in note.
Alert: HALISTER1- Reasons for the trade include:
- Fed is on hold, market “seems to trade on a technical basis,” and moved from overbought a few weeks ago to oversold before April 27 FOMC statement
- Market continued to sell off despite weakening economic data
- Rates have fallen after 5 of last 6 FOMC meetings
- Carry is 2.25bp/month, set stop at 2.05%
- BNP also recommends buying 5Y UST matched-maturity swap spread vs selling 2Y UST matched-maturity swap spread at -16.25p, targeting -9bp, carry 0.5bp/month, stop at -19bp
Source: BFW (Bloomberg First Word)
People
Daniel Tangho (BNP Paribas SA)
Timothy High (BNP Paribas SA)
To de-activate this alert, click here
UUID: 7947283