Tuesday, 11 September 2012

RBS Recommends 5-10-Year Treasury Steepener Ahead of QE3

The dealer suggests holding five-year Treasury notes again 10-years in anticipation of QE3 being delivered this Thursday by the Fed. It says to target a 1.20 percentage point yield gap between these two maturities, from 1.03 recently. RBS sees the Fed shifting from Operation Twist to a blended bond-buying plan that involves both MBS and Treasurys.

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