HALISTER1: UST Rally Looks ‘Fragile’ as Qtr-End Nears, Credit Agricole Says

UST Rally Looks ‘Fragile’ as Qtr-End Nears, Credit Agricole Says

(Bloomberg) -- Recent UST rally may have left leveraged investors “quite long and so the rally looks fragile,” particularly with qtr-end approaching, Credit Agricole strategist David Keeble writes in note.
  • “Exceptionally high” correlation between O/N GC repo suggests that funded investors are driving mkt movements
    • When USTs rally, leveraged investors are cutting shorts or increasing long positions
    • “Either way, there is an influx of collateral to the repo market, relative to the availability of cash”
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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David Keeble (Credit Agricole SA)

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