Gilt Sweet Spot Loses Shine After 10Y Yield Rebounds: Analysis
Source: BFW (Bloomberg First Word)
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UUID: 7947283
(Bloomberg) -- The long-favored 15Y-20Y sweet spot on the U.K. gilt curve, expected to benefit the most from BOE QE, is now underperforming, possibly due to crowded positioning.
Alert: HALISTER1- Analysts have been recommending various trades that benefit from 15Y-20Y outperformance; indeed, the sector surpassed most others ahead of the Aug. 4 BOE QE announcement
- Since the first week’s BOE QE operations were completed on Aug. 10, 10Y yields have been sat in a tight range while long-end rates have been rising sharply, led by by 15-20Y sector; see chart here
- On the curve, the 10s20s30s fly is cheaper by ~8bps since Aug. 10
- The underperformance probably comes as investors square positions after a substantial move
Source: BFW (Bloomberg First Word)
To de-activate this alert, click here
UUID: 7947283