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J.P.Morgan: Initiate FV/US Invoice Spread Steepeners, Paired With 20% USM3 Short

US TSYS

J.P.Morgan recommend “initiating exposure to a steeper FV/US invoice spread curve. In addition to being thematically consistent with our spread narrowing bias in the 5-Year sector and a widening bias in longer maturities, this spread curve is also well correlated to yield levels (with a beta of approximately -20%) and currently appears too flat. Therefore we recommend initiating FV/US invoice spread curve steepeners hedged with a 20% risk-weighted short in USM3.”

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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