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Citi Cautious On Spread Tightening

OAT
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Citi write “while a smaller than opinion poll-implied lead for RN might be an early relief for OATs, this doesn’t change our economists’ view of a deadlock or a RN-win in the final outcome.”

  • “Ahead, the key driver of spreads is likely to be RN/NFP-speak on their policy stances and any fine-tuning of polls.”
  • “On this basis, we caution against fading the OAT widening given the relatively low market-implied probability of the RN being able to implement their manifesto forcefully (~20%).”
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Citi write “while a smaller than opinion poll-implied lead for RN might be an early relief for OATs, this doesn’t change our economists’ view of a deadlock or a RN-win in the final outcome.”

  • “Ahead, the key driver of spreads is likely to be RN/NFP-speak on their policy stances and any fine-tuning of polls.”
  • “On this basis, we caution against fading the OAT widening given the relatively low market-implied probability of the RN being able to implement their manifesto forcefully (~20%).”