J.P.Morgan Has Tactical Flattening Bias On 10s/30s Curve

Late on Friday J.P.Morgan wrote “the 10s/30s gilt curve has traded in a range over the past couple of months and is towards the steep end of its recent ranges.”

• “Looking over the past 6 months we also note the 10s/30s gilt curve looks almost 5bp too steep vs. the level of 1Yx1Y SONIA, 30Y yields and the 10s/30s UST curve, its steepest relative level since last October.”
• “We also note that historically the level adjusted 10s/30s gilt curve has on average steepened around 2bp in the couple of weeks following prior 15Y+ gilt syndications, excluding the syndications in Sep22 and Nov22 around the LDI crisis.”
• “The adjusted 10s/30s curve has already steepened almost 5bp since the 2054 syndication and from a relative value perspective we have a tactical flattening bias on the 10s/30s gilt curve.”