HALISTER1: Expect Increased Buying of Non-Yen Bonds After Golden Week: MS

Expect Increased Buying of Non-Yen Bonds After Golden Week: MS

(Bloomberg) -- History suggests Japanese investors increase their non-yen bond buying dramatically following the end of Golden Week, Morgan Stanley strategists including Matthew Hornbach write in a client note.
  • This spurt of buying unlikely to last more than two weeks, if history repeats
  • Expect the belly of the UST curve to outperform, most of the buying concentrated in intermediates (5Y-15Y)
  • Previously recommended trades should benefit from this possible flow; maintain UST 5s30s steepener recommendation, given dovish Fed outlook; also long 5Y on 2s5s30s fly
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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MS US (Morgan Stanley)

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Matthew Hornbach (Morgan Stanley)

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