UST MORNING CALL: ‘Curve Will Reflatten’ as Fed Dust Settles
(Bloomberg) -- “We like the market largely for technical reasons and because we think that as the dust settles on the dovish Fed thing, the curve will reflatten,” CRT strategist David Ader says in note.
- “There’s not a lot of information coming forth in the next few days, or supply for that matter, and we certainly would buy shallow dips”
- Other observations from strategist morning notes:
- BMO (Aaron Kohli ): “As nominal 10yr JGBs hit their record low overnight, we find it worth noting the 90% correlation between the UMich survey’s 5-10yr inflation expectations and 10yr JGB yields”
- FTN (Jim Vogel): “Lower trading volume” indicates “relief the FOMC aftershocks weren’t more severe,” that action is “in foreign exchange rather than fixed income,” and “a lot of internal conversations about how and when the Fed might change its mind (again)”
- “What volume there is, however, has relinked with the technicals in place before the ECB meeting last week”
- Marty Mitchell (independent): “With the bond market better bid already this morning, we expect that the positive tone will persist throughout the morning hours,” as “bond bulls have been emboldened by the dovish posture at the Fed and by lower yields overseas”
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
People Aaron Kohli (Bank of Montreal)
David Ader (CRT Capital Group LLC)
Jim Vogel (Ftn Financial)
Marty Mitchell (The Mitchell Market Report LLC)
Topics UST Morning Call
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