Citi Recommends Bullish Credit Stance as Risks May be Overblown
Alert: HALISTER1
Source: BFW (Bloomberg First Word)
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Anindya Basu (Citigroup Inc)
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UUID: 7947283
(Bloomberg) -- Citi strategists advise staying long on credit into year-end by selling default-swap insurance.
- “Despite stretched valuations and central bank tightening, spreads are likely to remain range bound into year-end,” strategists including New-York-based Anindya Basu say in note. “The gradual pace of Fed balance sheet reduction is unlikely to affect spreads meaningfully, and the considerable carry from long credit should be enough to offset a modest spread widening.”
- Say the best long in CDX IG is to sell payers; for CDX HY, an index long risk position is best
- The Fed will pare its balance sheet by $10b/month, an amount “surely too small to impact asset allocation decisions for investors in the short term,” according to Citi. The pace is seen rising to as much as $50b a month by 3Q 2018
- June 14: Forget Bonds, Citi Is Plugging Credit Swaps for Bullish Bets
- Aug. 9: CDS indexes are more liquid than cash bonds, BAML Says
Alert: HALISTER1
Source: BFW (Bloomberg First Word)
People
Anindya Basu (Citigroup Inc)
To de-activate this alert, click here
To modify this alert, click here
UUID: 7947283