Fed’s Gradual Path Leads TD to Recommend 5s30s Flattener Trade
Alert: HALISTER1
Source: BFW (Bloomberg First Word)
People
Cheng Chen (TD Securities USA LLC)
Gennadiy Goldberg (TD Securities USA LLC)
Priya Misra (TD Securities USA LLC)
Topics
First Word Credit Asia
First Word Credit Europe
First Word Credit US
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UUID: 7947283
(Bloomberg) -- Fed’s commitment to gradual pace of rate increases and portfolio run-off should pressure belly of the curve relative to the long end, TD strategists Priya Misra, Gennadiy Goldberg, Cheng Chen said in note.
- “We fade the recent steepening of the 5s30s curve” and see imminent shift in ECB policy as “largely priced in”
- TD initiates 50k DV01 of 5s30s flatteners at 102bp, targeting 93bp, with a stop loss level at 107bp
- Biggest risks to the position would be a weak CPI print Friday, which could slow market-implied pace of Fed hikes, and a further sell-off in bunds, which would push long end of global rates higher
Alert: HALISTER1
Source: BFW (Bloomberg First Word)
People
Cheng Chen (TD Securities USA LLC)
Gennadiy Goldberg (TD Securities USA LLC)
Priya Misra (TD Securities USA LLC)
Topics
First Word Credit Asia
First Word Credit Europe
First Word Credit US
To de-activate this alert, click here
To modify this alert, click here
UUID: 7947283