HALISTER1: Buy Long-Term Colombia TES Bonds on Inflation Decline: BofA

Buy Long-Term Colombia TES Bonds on Inflation Decline: BofA

(Bloomberg) -- “Long TES bonds will likely benefit from a persistent decline in inflation. They should also benefit from higher crude oil prices,” BofA strategist Ezequiel Aguirre writes in note.
  • Forecasts an easing cycle of 175bps to start in January
    • Cuts inflation forecasts for 2016 to 6.3% from 6.8%; to 4.1% for 2017 from 4.4%
  • Recommends Sept. 2030 bonds, seen as cheapest across the yield curve based on marginal forward rates
  • Oil prices should remain the main driver in the near term; budget deficits and a potential credit-rating downgrade are risk factors
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Ezequiel Aguirre (Bank of America Corp)

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