J.P.Morgan Recommend Paying 5Yx5Y vs. U.S. 2Yx2Y

J.P.Morgan note that "given the global flattening, we see value in tilting into a more directionally bearish position in the AUD long-end, particularly as 'high beta' economies/long-ends should recover most strongly; a cross-market steepener would also incorporate the possibility that RBA hike pricing is brought forward further relative to the U.S. On this front, levels are attractive to pay AUD 5Yx5Y IRS vs. USD 2Yx2Y IRS. This spread is near its pandemic-period trough, is in the lower envelope of residuals on regression to U.S. 2s/10s, and has only historically dropped beneath current levels when the U.S. curve is sub-50bp. That was clearly a late Fed hiking cycle dynamic, a combination which seems unlikely to be priced again soon when tapering hasn't even begun. We pay 25K DV01 AUD 5Yx5Y IRS (S/S) at 2.037%, receive 25K DV01 USD 2Yx2Y IRS (S/S) at 1.108%, a spread of +92.9bp."