May 08, 2024 08:32 GMT
SocGen Trade Recommendations As They Look For Carry Plays
AUSSIE BONDS
Societe Generale write “in the context of a ‘higher for longer narrative,’ structures which carry positively look attractive.”
- “An important further consideration is the possible asymmetry to which movements in yields are skewed - despite RBA Governor Bullock’s remarks on maintaining the status quo, they did actively consider hiking.”
- “As a result, there is likely to be increased levels of noise around forthcoming data releases - and any surprise to the upside could quickly see hike expectations repriced.”
- They recommend paying 1Y1Y vs receiving 1Y2Y AUD IRS and paying 1Y1Y vs receiving 3Y2Y AUD IRS, both with a 6-month horizon.
100 words