Expect Double-Dip EUR Inflation Recovery; Favor Breakevens: Barc
(Bloomberg) -- EUR 10Y breakeven most attractive sector to position for inflation recovery, Barclays strategist Khrishnamoorthy Sooben writes in a client note.
- Given that most of the forces driving the rebound are set to soften in 1H 2016, Barclays economists expect inflation to fall into negative territory before technical factors push it back up by year end
- See long-term value in breakevens, but any near-term recovery seems tied to general sentiment on risky assets
- Bullish on real yields, given expectations for more ECB policy action in March
- Despite steep curve, investors looking at inflation swaps as a long-term hedge may see value in back end
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
People Khrishnamoorthy Sooben (Barclays PLC)
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