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Morgan Stanley: Buy OATs On The 10y Bund/OAT/Bono Barbell

EGBS

Late Friday saw Morgan Stanley recommend going long OATs on the 10y Bund/OAT/Bono barbell (weights: 0.65/1.00/0.35).

  • They noted that “risks around S&P’s review of France seem asymmetric. We see little potential for a further cheapening in case of a downgrade, and should S&P leave their rating unchanged, OATs would likely richen back relative to peers.”
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Late Friday saw Morgan Stanley recommend going long OATs on the 10y Bund/OAT/Bono barbell (weights: 0.65/1.00/0.35).

  • They noted that “risks around S&P’s review of France seem asymmetric. We see little potential for a further cheapening in case of a downgrade, and should S&P leave their rating unchanged, OATs would likely richen back relative to peers.”