Exit 10Y Swap Spreads Widener, Enter Spread Tightener: Citi
Source: BFW (Bloomberg First Word)
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UUID: 7947283
(Bloomberg) -- Citi recommends closing tactical 10Y swap spreads widener recommended on Sept. 23 and initiating spread tightener “to position for seasonality in issuance, selling pressure from reserve managers, and wider budget deficits,” strategist Ruslan Bikbov says in note.
Alert: HALISTER1- Seasonal analysis suggests spreads tend to tighten in early October ahead of looming “pent-up” supply
- Reserve manager selling to shorten duration and wider deficit expectations ahead of presidential election could help drive tightening
- Spread tightener initiated at -15.65bp, targeting -20.5bp, stop-loss at -13bp
- Risks to trade include widening FRA/OIS due to money market fund reform and dollar funding pressure on European banks
Source: BFW (Bloomberg First Word)
To de-activate this alert, click here
UUID: 7947283