HALISTER1: Pay Singapore 2-Year Swaps vs U.S. 2-Year Swaps on Fed: SocGen

Pay Singapore 2-Year Swaps vs U.S. 2-Year Swaps on Fed: SocGen

(Bloomberg) -- Societe Generale recommends paying Singapore’s 2-year interest-rate swaps vs receiving U.S.’s 2-year IRS at a spread of 39 bps, Frances Cheung, head of Asia ex-Japan rates strategy, writes in note today.
  • Target is 75 bps and stop-loss order is at 21 bps; trade horizon is 2 to 3 mos.
  • A hawkish outcome from FOMC meeting is likely to drive SGD IRS higher, more so than a dovish one that pressures SGD IRS further down relative to USD IRS; says FOMC may take another step toward hiking rates in Dec. by re-introducing balance for risks statement for first time this year
  • Sees FX as another factor potentially driving SGD swaps higher
  • NOTE: Spread between SGD 2-year IRS and USD 2-year IRS is now at 38 bps
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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GLE FP (Societe Generale SA)

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Frances Cheung (Societe Generale SA)

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