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Natixis Like 2y/5y Breakeven Steepener

US TSYS/TIPS

Natixis write “if, as far as inflation is concerned, “the last mile is the hardest,” the inverted sign of the 2-5y breakeven UST curve presents an attractive opportunity.”

  • “As central banks and investors might be wrong about the mean-reverting feature of the inflation dynamics, given recent surprises on the two last data points, either the 2-year breakeven is too high or the 5-year is too low.”
  • They recommend a long 2y/5y UST breakeven curve trade at -0.4bp, targeting +25bp in the next 3 months. Stop set at -14bp.
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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