Halister News

(Bloomberg) -- This week’s sharp decline in global safe-haven yields “is not justified,” as “concurrent economic data strongly suggest that fundamentals are not that bleak,” however “we do not see a convincing near-term catalyst for a reversal,” strategists led by Rajiv Setia say in Feb. 11 note.

• Also, “if market volatility stays at such elevated levels, it may very well adversely affect confidence and the economic outlook”
• Fed “implicitly expects markets to come around to their view that fundamentals remain solid,” a divergence that “is likely to continue in the near term”
• Barclays was stopped out on recommendation to be short FFJ6 contract and pay 2Y OIS, and has turned neutral on 5/30 curve flattener view
• “Given the flattening over the past week, despite a sharp rally in intermediate rates, the curve looks only marginally steep versus our fair value model”