HALISTER1: RATES: ‘Flattening Move Has Run Out of Gas,’ BMO Says

RATES: ‘Flattening Move Has Run Out of Gas,’ BMO Says

(Bloomberg) -- While outperformance at the long-end of UST curve is still possible, near-term technical rationale for previously recommended 10/30 flattener “has faded and the return of Fed speak will give the market an opportunity to take stock and recalibrate,” BMO strategist Aaron Kohli says in note.
  • After Fed’s “surprise dovishness” on Wed., 10/30 flattener moved through rolling stop at 80bp (original target was 75bp), and “we looked for further flattening to 73.5bp”
  • However, momentum indicators suggest “there is a small consolidation underway around the 78.5bp level”
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Aaron Kohli (Bank of Montreal)

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